Lincoln Level Advantage 2® B-Share Index-Linked Annuity Contracts
May 8, 2026
Home Office:
Lincoln Life & Annuity Company of New York
120 Madison Street, Suite 1310
Syracuse, NY 13202
www.LincolnFinancial.com
Lincoln Life & Annuity Company of New York
120 Madison Street, Suite 1310
Syracuse, NY 13202
www.LincolnFinancial.com
Servicing Office:
Lincoln Life & Annuity Company of New York
PO Box 2348
Fort Wayne, IN 46801-2348
1-877-737-6872
Lincoln Life & Annuity Company of New York
PO Box 2348
Fort Wayne, IN 46801-2348
1-877-737-6872
This prospectus describes an individual single premium index-linked deferred annuity contract issued by Lincoln Life & Annuity Company of New York (Lincoln New York or Company).
This Contract can be purchased as either a nonqualified annuity or qualified retirement annuity under Section 408 (IRAs) or 408A (Roth IRAs) of the tax code. Generally, you do not pay federal income tax on the Contract's growth until it is paid out. You receive tax deferral for an IRA whether or not the funds are invested in an annuity contract. Further, if your Contract is a Roth IRA, you generally will not pay income tax on a distribution, provided certain conditions are met. Therefore, there should be reasons other than tax deferral for purchasing a qualified annuity contract. We offer other types of annuity contracts that may offer different investment options, features, and optional benefits. You should carefully consider whether or not this Contract is the best product for you.
This Contract is a complex investment and involves risks, including potential loss of principal.
The Contract is designed to accumulate Contract Value and to provide retirement income over a certain period of time or for life subject to certain conditions. The Contract offers several Indexed Accounts which provide a rate of return based in part on the performance of an Index you select. This Contract also offers a Death Benefit payable upon the death of the Contractowner or Annuitant. This prospectus is used by both new purchasers and current Contractowners and describes all material rights and obligations of annuity purchasers under the Contract. The Contract described in this prospectus is only available in New York.
If you are a new investor in the Contract, you may cancel your Contract within ten days of receiving it without paying fees or penalties although any Contract Adjustments will be applied. This free-look or cancellation period may be longer if you are replacing an existing contract. Upon cancellation, you will receive the greater of a full refund of the amount you paid with your application or your total Contract Value, less any withdrawals. You should review this prospectus and consult with your registered representative for additional information about the specific cancellation terms that may apply.
The minimum Purchase Payment for the Contract is $25,000. No Purchase Payments will be accepted after the date the Contract is issued. Accordingly, you will be unable to increase your Contract Value or Death Benefit by making subsequent Purchase Payments. The minimum allocation to an Indexed Account is $2,000 and you can only reallocate Contract Value to an Indexed Account on an Indexed Anniversary Date.
You may invest in one or more of the available Indexed Accounts, subject to any limitations described herein. See Appendix A – Investment Options Available Under The Contract. Indexed Accounts are established for either 1-Year or 6-Year Terms, and the return on these accounts at the end of the Indexed Term is based in part on the performance of a specified Index. Each Indexed Account will have either (i) a specified Performance Cap, which is the highest Performance Rate that we will credit; (ii) a Performance Trigger Rate that provides a specified rate of return if the performance of the Index is zero or positive; (iii) a Dual Performance Trigger Rate, which will either provide a specific rate of return if the performance of the Index is positive, zero or negative within the Protection Level or be added to the Index performance percentage and the Protection Level if the Index performance is negative and beyond the Protection Level; or (iv) a Dual Rate, which will provide either a minimum rate of return if the Index performance is between zero and the Dual Rate, or will be added to the Index performance if the Index performance is negative, and a Performance Cap that applies if the Index performance exceeds the Dual Rate. We will not offer a 1-Year Indexed Account with a Performance Cap or Performance Trigger Rate below 4.00% or a 6-Year Annual Lock Indexed Account with a Performance Cap below 5.00%. We will not offer a 1-Year Indexed Account with a Dual Performance Trigger Rate below 5.00%. We will not offer a 6-Year Performance Cap Indexed Account with a Performance Cap below 21.00%. We will not offer a 6-Year Dual Plus Indexed Account with a Performance Cap below 27.00%. If you choose to lock the Interim Value of an Indexed Segment under Secure Lock+®, we will reset the Performance Cap for that Indexed Segment, and that Reset Rate may be lower than these stated minimums. We will not offer a Reset Rate under Secure Lock+® less than 3.50%. The amount of gain credited for each Indexed Segment at the end of an Indexed Term will be limited by the Performance Cap, Performance Trigger Rate or Dual Performance Trigger Rate we declare. We guarantee a minimum declared crediting rate for each Indexed Account. See Appendix A – Investment Options Available Under The Contract for the guaranteed minimum declared crediting rates for each Indexed Account.
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The amount of loss from negative Index performance for each Indexed Segment at the end of an Indexed Term is limited by the Protection Level or the Dual Rate for that Segment. Your Contract Value will not be impacted by any loss up to the applicable Protection Level or Dual Rate that you choose if you do not make withdrawals during the Indexed Term. Under extreme circumstances, you could lose up to 90% of your investment in an Indexed Account with a 10% Protection Level or a 10% Dual Rate, up to 85% of your investment in an Indexed Account with a 15% Protection Level or a 15% Dual Rate, up to 80% of your investment in an Indexed Account with a 20% Protection Level, and up to 75% of your investment in an Indexed Account with a 25% Protection Level. This potential of loss exists for each Indexed Term, and over the life of the Contract which could be much greater. We do not guarantee that the Contract will always offer Indexed Accounts that limit Index losses, in which case you could lose the entire amount of your investment.
This Contract is not designed for short-term investing and is not appropriate for the investor who needs ready access to cash. Withdrawals could result in surrender charges, negative Contract Adjustments, taxes, and tax penalties. Your risk of loss may be greater if you make a withdrawal prior to the End Date of an Indexed Term because a negative Contract Adjustment based on the Interim Value of the Indexed Segment may apply. The Interim Value for each Indexed Segment is calculated each Valuation Date prior to the End Date of the Indexed Term. The Interim Value calculation is not based on the value of the Index but the fair market value of the portfolio of investment instruments supporting the Indexed Segment. Under extreme conditions a negative Contract Adjustment based on Interim Value could result in a loss of up to 100% of your Contract Value. Such loss can occur even if an Index has increased in value. This means your Interim Value could reflect negative performance, even if the Index Value has increased.
If you withdraw Contract Value prior to the End Date of an Indexed Term, the withdrawal will cause an immediate reduction in your Indexed Crediting Base for each of your Segments in a proportion equal to the reduction in the Interim Value of each Segment. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions in your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Segment Ending Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term unless Secure Lock+® is exercised.
We hold all or a portion of the assets for our obligations for the Indexed Account options in a non-registered, non-insulated separate account, established by Us. We do not guarantee how any of the Indexed Accounts will perform. There is a risk of loss of your investment because you agree to absorb all losses in excess of the level of protection you selected.
Investors should consult a registered representative about the Contract’s features, benefits, risks, and fees, and whether the Contract is appropriate for the investor based upon your financial situation and objectives. We do not guarantee that all of the Indexed Account options will always be available. Our obligations under the Contract, including amounts to be paid to you from the Indexed Accounts, are subject to our financial strength and claims paying ability.
Neither the U.S. Government nor any federal agency insures or guarantees your investment in the Contract. The Contracts are not bank deposits and are not endorsed by any bank or government agency.
Additional information about certain investment products, including registered index-linked annuities, has been prepared by the SEC’s staff and is available online at www.Investor.gov.
The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Special Terms
In this prospectus, the following terms have the indicated meanings:
Annual Locks—An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date.
Annuitant—The person upon whose life the annuity benefit payments are based, and upon whose death a Death Benefit may be paid.
Annuity Commencement Date—The Valuation Date when payment of retirement income benefits begins under the Annuity Payout option you select.
Annuity Payout—A regularly scheduled payment (under any of the available annuity options) that occurs after the Annuity Commencement Date.
Beneficiary—The person you choose to receive any Death Benefit paid if you die before the Annuity Commencement Date.
Contract—The index-linked annuity contract you have entered into with Lincoln New York.
Contract Adjustment—A positive or negative adjustment to the Contract based on the Interim Value of an Indexed Segment.
Contractowner (you, your, owner)—The person who can exercise the rights within the Contract (decides on investment allocations, reallocations, payout option, designates the Beneficiary, etc.). Usually, but not always, the Contractowner is the Annuitant.
Contract Value (may be referred to as Account Value in marketing materials)—The sum of the current values of the Indexed Accounts (i.e. Interim Values if between the Start Date and the End Date of an Indexed Term).
Contract Year—Each 12-month period starting with the effective date of the Contract and starting with each contract anniversary after that.
Crediting Method—The method used in determining the Performance Rate for an Indexed Segment. There are several Crediting Methods including Performance Cap, Performance Trigger Rate, Dual Performance Trigger Rate, and Dual Plus.
Death Benefit—Before the Annuity Commencement Date, the amount payable to your designated Beneficiary if the Contractowner dies. As an alternative, the Contractowner may receive a Death Benefit upon the death of the Annuitant prior to the Annuity Commencement Date.
Dual Performance Trigger Rate—The rate used, in part, to determine the Performance Rate for an Indexed Segment at the end of the Indexed Term.
Dual Rate—The rate used, in part, to determine the Performance Rate for an Indexed Segment of a Dual Plus Indexed Account at the end of the Indexed Term.
Dual Plus—A Crediting Method that uses, in part, a Performance Cap and Dual Rate to determine the Performance Rate for an Indexed Segment at the end of the Indexed Term.
End Date—The last day of the Indexed Term.
Good Order—The actual receipt at our Servicing Office of the requested transaction in writing or by other means we accept, along with all information and supporting legal documentation necessary to complete the transaction. The forms we provide will identify the necessary documentation. We may, in our sole discretion, determine whether any particular transaction request is in Good Order, and we reserve the right to change or waive any Good Order requirements at any time.
Index—The market index of which the performance is used to base the return of an Indexed Account.
Index Value—The published closing value of an Index on a Valuation Date. If an Index Value is not published for a particular day, we will use the closing Index Value on the next Valuation Date it is published.
Indexed Account—An investment option that provides a return based, in part, on the performance of an Index.
Indexed Anniversary Date—The same calendar day, each calendar year, as the day you first invested in an Indexed Segment.
Indexed Crediting Base or Crediting Base—An amount used in the calculation of the performance return and the Interim Value for an Indexed Segment.
Indexed Segment or Segment—The specific Indexed Account option(s) selected by a Contractowner for allocations of the Purchase Payment or reallocation of Contract Value.
Indexed Term or Term—The period of time during which Contract Value is invested in a particular Indexed Segment.
Interim Value—Your Contract Value for an Indexed Segment during an Indexed Term. The Interim Value is a calculated value and is used in the event that a withdrawal, Death Benefit payment, reallocation, annuitization, or surrender occurs at any time other than the Start Date or End Date of an Indexed Term. The Interim Value is also used when Secure Lock+® is chosen.
Lincoln New York (we, us, our, Company)—Lincoln Life & Annuity Company of New York.
Performance Cap or Cap—The highest Performance Rate that can be credited to an Indexed Segment at the end of an Indexed Term for any positive Index performance.
Performance Rate—A rate of return for an Indexed Segment based on the performance of an Index over a specified period of time, adjusted for the applicable Protection Method and subject to the Crediting Method, depending on the Indexed Account you choose.
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Performance Trigger Rate— The rate used to determine the Performance Rate for an Indexed Segment at the end of the Indexed Term if the Index performance is zero or positive.
Protection Level—The portion of loss that the Company will absorb from any negative Index performance. If the Index performance is negative by more than the Protection Level, there is a risk of loss of principal and any previously credited amount to the Contractowner. The Protection Level is not available on Dual Plus accounts.
Protection Method—The method used in protecting from negative Index performance at the end of an Indexed Term, including Protection Levels and Dual Rates.
Purchase Payment—The initial investment made by a single premium payment to purchase this Contract.
Reset Date—The most recent Valuation Date that an Indexed Segment was reset.
Reset Rate—The new Performance Cap if you choose to lock the Interim Value of an Indexed Segment before the end of the Indexed Term under Secure Lock+®.
Secure Lock+®—A feature that allows the Interim Value to be locked in on any given Valuation Date, other than an Indexed Anniversary, for an Indexed Segment.
Segment Ending Value—The value of an Indexed Segment on the End Date after adjustment for the Performance Rate.
Start Date—The Valuation Date on which the Indexed Segment begins.
Valuation Date—Each day the New York Stock Exchange (NYSE) is open for trading.
Valuation Period—The period starting at the close of trading (normally 4:00 p.m., Eastern Time) on each day that the NYSE is open for trading (Valuation Date) and ending at the close of such trading on the next Valuation Date.
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Overview of the Contract
Purpose of the Contract
The Lincoln Level Advantage 2® B-Share Index-Linked Annuity contract is designed to accumulate Contract Value and to provide income over a certain period of time or for life, subject to certain conditions. The Contract can supplement your retirement income by providing a stream of income payments during the payout phase. The Contract offers several Indexed Accounts which provide a rate of return based in part on the performance of an Index you select and a Death Benefit payable to your designated Beneficiaries upon the death of a Contractowner or Annuitant.
This Contract may be appropriate if you have a long-term investment horizon. It is not intended for people who may need to make early or frequent withdrawals. See Surrenders and Withdrawals.
Phases of the Contract
Your Contract has two phases: (1) an accumulation (savings) phase, prior to the Annuity Commencement Date; and (2) a payout (income) phase, after the Annuity Commencement Date.
Accumulation (Savings) Phase. To help you accumulate assets during the accumulation phase, you can invest your Purchase Payment and earnings in the Indexed Accounts available under the Contract, each of which has its own Index, Indexed Term, Crediting Method, and Protection Method. The available Indexed Accounts are listed in Appendix A – Investment Options Available Under The Contract.
Different Crediting Methods and Protection Methods are available for your Indexed Accounts. We will credit positive, negative, or zero interest at the end of an Indexed Term to amounts allocated to an Indexed Account based, in part, on the performance of the Index. Interest is credited for any gain or deducted for any loss only on the End Date of an Indexed Segment. You could lose a significant portion of your investment if the Index declines in value.
The Protection Method you select determines the type of protection you will have for each Indexed Segment. For Indexed Accounts with Protection Level, the Protection Level is the portion of any negative Index performance that will not impact your Contract Value if you do not make any withdrawals until the End Date of the Indexed Segment. Your Contract Value will not be impacted up to the amount of the Protection Level you elect, and, after that, the Indexed Segment will be impacted for the remaining portion of the loss. For example, if the Index return is -15% and you have a 10% Protection Level, your Contract Value will not be impacted by the first 10% of negative Index performance and we will deduct 5% at the end of the Indexed Term. Any loss will reduce the amount of your investment in the Indexed Segments. The Contract offers Indexed Accounts with Protection Levels that protect you against losses of 10% to 25%.
For Indexed Accounts with a Dual Rate, if the Index performance is negative, your Performance Rate equals the Index performance plus the Dual Rate, which may result in either a negative or positive return. For example, if the Index return is -10% and you have a Dual Rate of 15%, we will credit 5% in interest at the end of the Indexed Term. If the Index return is -20% and you have a Dual Rate of 15%, we will deduct 5% in interest at the end of the Indexed Term. Any loss will reduce the amount of your investment in the Indexed Segments. The Contract offers Indexed Accounts with Dual Rates of 10% or 15%.
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Annuity (Income) Phase. You can elect to annuitize your Contract and turn your Contract Value into a stream of income payments (sometimes called Annuity Payouts), at which time the accumulation phase of the Contract ends. These payments may continue for a set period of years, for as long as you live, or for the longer of the two.
If you annuitize, your investments will be converted to income payments and you will no longer be able to choose to make withdrawals from your Contract. All benefits during the accumulation phase (including guaranteed minimum Death Benefits) terminate upon annuitization.
Primary Features and Options of the Contract
Accessing your money. During the accumulation phase, you can surrender the Contract or withdraw part of the Contract Value. If you surrender or take an early withdrawal, you may have to pay a surrender charge, taxes and a tax penalty if you are younger than 59½. No interest will be credited to funds withdrawn or surrendered before the end of an Indexed Term. Additionally, if you surrender the Contract or withdraw from an Indexed Segment prior to its End Date, you will be subject to a Contract Adjustment based on the Interim Value.
Secure Lock+®. On any Valuation Date, excluding an Indexed Anniversary, one time each Contract Year between the Term Start Date and Term End Date, you may request to lock the Interim Value (“Secure Lock+®”) of an Indexed Segment.
You could lose a significant amount of money due to the Contract Adjustments based on Interim Values if amounts, are removed from an Indexed Segment prior to the Segment End Date. The Interim Value calculated at the end of the Valuation Date will be locked in and once selected, a Secure Lock+® is irrevocable. If you request a lock-in of the Indexed Segment when the Interim Value is below your Indexed Crediting Base, Protection Methods do not apply and you assume all loss. Secure Lock+® is not available with all Crediting Methods and Protection Methods or upon the selection of an Annuity Payout option. Withdrawals prior to the Segment End Date may have a significant impact on your Contract Value. See the Contract Adjustments discussion below.
Tax treatment. Earnings (if any) on your investments are generally tax-deferred. You are taxed only when: (1) you take a withdrawal or surrender; (2) you receive an income payment from the Contract; or (3) upon payment of a Death Benefit.
Death Benefit. Your Contract includes a Death Benefit that will be paid upon the death of either the Contractowner(s) or the Annuitant.
Additional Service. The Automatic Withdrawal Service allows you to automatically take periodic withdrawals from your Contract, and is available under the Contract for no additional charge.
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Important Information You Should Consider About the Lincoln Level Advantage 2® B-Share Index-linked Annuity Contract
|
|
FEES, EXPENSES, AND ADJUSTMENTS |
Location in
Prospectus |
|
Are There Charges or
Adjustments for Early
Withdrawals? |
Yes:
A surrender charge may apply to a surrender or withdrawal of a
Purchase Payment prior to the
Payment was invested, up to
0% over that time period. For example, if you make a withdrawal of
$100,000 during the first year after your Purchase Payment, you could
be assessed a charge of up to $
withdrawn. A surrender charge will not apply if your surrender or
withdrawal is made after the 6th anniversary since a Purchase Payment
was invested. This loss will be greater if there is a negative Contract
Adjustment based on Interim Values, taxes, or tax penalties. |
●Fee Tables ●Charges and
Adjustments –
Surrender Charge ●Charges and
Adjustments –
Contract
Adjustments |
|
Are There Transaction
Charges? |
|
●Fee Tables ●Charges and
Adjustments |
|
Are There Ongoing Fees and
Expenses? |
|
●Fee Tables ●Charges and
Adjustments –
Surrender Charge |
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|
|
RISKS |
Location in
Prospectus |
|
Is There a Risk of Loss
From Poor Performance? |
|
●Principal Risks of
Investing in the
Contract |
|
Is This a Short-Term
Investment? |
|
●Principal Risks of
Investing in the
Contract ●Surrenders and
Withdrawals ●Fee Tables ●Charges and
Adjustments |
10
|
|
RISKS |
Location in
Prospectus |
|
What are the Risks
Associated
With the Investment
Options? |
|
●Principal Risks of
Investing in the
Contract |
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|
|
RISKS |
Location in
Prospectus |
|
What are the Risks Related
to the Insurance Company? |
|
●Principal Risks of
Investing in the
Contract |
|
|
RESTRICTIONS |
Location in
Prospectus |
|
Are There Restrictions
on the Investment Options? |
|
●Indexed Accounts ●Appendix A –
Investment Options
Available Under The
Contract |
|
Are There any Restrictions
on Contract Benefits? |
|
●The Contracts |
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|
|
TAXES |
Location in
Prospectus |
|
What are the Contract’s
Tax Implications? |
|
●Federal Tax Matters |
|
|
CONFLICTS OF INTEREST |
Location in
Prospectus |
|
How are Investment
Professionals Compensated? |
|
●Distribution of the
Contracts |
|
Should I Exchange My
Contract? |
●
|
●The Contracts -
Replacement of
Existing Insurance |
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|
Surrender charge (as a percentage of Purchase Payments surrendered/withdrawn):1 |
|
|
Contract Adjustment (Interim Value) Maximum Potential Loss (as a percentage of Contract Value at the start of an
Indexed Term) |
|
|
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15
16
17
18
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Indexed Term. The Indexed Term is the specified period of time over which an Index’s performance is measured, subject to applicable limits on Index gains and losses, to determine the amount of positive, negative or zero interest that will be credited to an Indexed Account at the end of the period. 1-Year and 6-Year Indexed Terms are available in this Contract. An Indexed Segment begins on the day your money is allocated to an Indexed Segment, called the Start Date. The yearly anniversary of the Start Date of the initial Indexed Segment is the Indexed Anniversary Date of your Contract. This is the Indexed Anniversary Date for the life of your Contract.
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Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
|
Indexed
Segment
Anniversary |
Index %
Change |
Indexed Segment
Performance
Rate (adjusted for
Cap or Protection
Level) |
Indexed Segment
Performance
Amount |
Adjusted Indexed
Crediting Base/
Anniversary
Value |
|
1/8/2027 |
+7% |
+7% |
$7,000 |
$107,000 |
|
1/8/2028 |
+12% |
+10% |
$10,700 |
$117,700 |
|
1/8/2029 |
-13% |
-3% |
-$3,531 |
$114,169 |
|
1/8/2030 |
-5% |
0% |
$0 |
$114,169 |
|
1/8/2031 |
+5% |
+5% |
$5,708 |
$119,877 |
|
1/8/2032 |
+17% |
+10% |
$11,988 |
$131,865 |
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23
24
25
Indexed Account = 1-Year Indexed Account with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2027
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Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2028
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Ending Value = $95,000 ($95,000 - $0)
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28
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|
Reallocating To |
Reallocating From | |
|
1-Year Term |
6-Year Term | |
|
1-Year Term |
Allowed on any
Indexed Anniversary Date |
Allowed on any
Indexed Anniversary Date |
|
6-Year Term |
Allowed only on every 6th
Indexed Anniversary Date |
Allowed only on every 6th
Indexed Anniversary Date |
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4/1/2030 Interim Value is $120,000
4/1/2030 The Contractowner decides to lock-in the $120,000 Interim Value
5/1/2030 Crediting Base is reset to $120,000
4/1/2030 Interim Value is $90,000
4/1/2030 The Contractowner decides to lock-in the $90,000 Interim Value
5/1/2030 Crediting Base is reset to $90,000
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Charges and Adjustments
We will deduct the charges described below to cover our costs and expenses, services provided and risks assumed under the contracts. We incur certain costs and expenses for the distribution and administration of the contracts and for providing the benefits payable thereunder.
Our administrative services include:
●
processing applications for and issuing contracts;
●
processing purchases and redemptions from Indexed Accounts as required (including automatic withdrawal services if available – See Additional Services and the SAI for more information on this program);
●
maintaining records;
●
administering Annuity Payouts;
●
furnishing accounting and valuation services (including the calculation and monitoring of daily Indexed Contract Values and Interim Values);
●
reconciling and depositing cash receipts;
●
providing contract confirmations;
●
providing toll-free inquiry services; and
●
furnishing telephone and other electronic surrenders, withdrawals and reallocations.
The risks we assume include:
●
the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed);
●
the risk that more Contractowners than expected will qualify for waivers of the surrender charge;
●
the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change);
●
the risks related to supporting and replicating Indexed Account performance with our assets.
The amount of a charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the description of the charge. For example, any applicable surrender charges may not fully cover all of the sales and distribution expenses actually incurred by us. Any remaining expenses will be paid from our general account which may consist, among other things, of proceeds derived from the base contract expenses deducted from the account. We may profit from the charges deducted under the Contract and from amounts earned on the Indexed Accounts. We may use these profits for any corporate purpose, including financing the distribution of the Contracts.
Obligations under the Contracts that are funded by our general account include 1) the obligation to pay Death Benefits that exceed the Contract Value; 2) the obligation to pay Annuity Payouts that exceed the Contract Value; and 3) our obligations under the Indexed Accounts. Payment of these benefits and obligations is subject to our claims-paying ability and financial strength. We are also responsible for providing for all of the administrative services necessary in connection with the Contract (and bearing all of the associated expenses).
Surrender Charge
A surrender charge applies (except as described below) to surrenders and withdrawals of the Purchase Payment that has been invested for the period below. The contract anniversary is the annually occurring date beginning with the effective date of the Contract. For example, if the effective date of your Contract is January 2nd, your contract anniversary would be on January 2nd of each subsequent year.
|
|
Number of contract anniversaries since Purchase Payment was invested | ||||||
|
|
0 |
1 |
2 |
3 |
4 |
5 |
6 |
|
Surrender charge as a percentage
of the surrendered or
withdrawn Purchase Payment |
7
% |
7
% |
6
% |
5
% |
4
% |
3
% |
0
% |
A surrender charge does not apply to:
●
A surrender or withdrawal of a Purchase Payment beyond the sixth anniversary;
●
Withdrawals of Contract Value during a Contract Year to the extent that the total Contract Value withdrawn during the current Contract Year does not exceed free amount. The free amount is equal to 10% of the current Contract Value. This free amount exception does not apply upon surrender of the Contract;
●
Purchase Payment used in the calculation of the initial benefit payment to be made under an Annuity Payout option;
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●
A surrender or withdrawal of the Purchase Payment, as a result of permanent and total disability of the Contractowner as defined in Section 22(e)(3) of the tax code, if the disability occurred after the effective date of the Contract and before the 65th birthday of the Contractowner;
●
A surviving spouse, at the time he or she assumes ownership of the Contract as a result of the death of the original owner (however, the surrender charge schedule of the original Contract will continue to apply to the spouse's Contract);
●
A surrender or withdrawal of the Purchase Payment, as a result of the admittance of the Contractowner to an accredited nursing home or equivalent health care facility, where the admittance into the facility occurs after the effective date of the Contract and the owner has been confined for at least 90 consecutive days;
●
A surrender or withdrawal of the Purchase Payment as a result of the diagnosis of a terminal illness of the Contractowner. Diagnosis of a terminal illness must be after the effective date of the contract and results in a life expectancy of less than one year as determined by a qualified professional medical practitioner;
●
A surrender of the Contract as a result of the death of the Contractowner or Annuitant;
●
A required minimum distribution (RMD) taken systematically under the Lincoln RMD program, in excess of the free amount;
●
Periodic income payments made under any Annuity Payout option made available by us.
For purposes of calculating the surrender charge on withdrawals, we assume that:
1.
The free amount will be withdrawn from the Purchase Payment.
2.
Any amount withdrawn above the free amount during a Contract Year will be withdrawn in the following order:
●
from the Purchase Payment until exhausted; then
●
from earnings until exhausted.
We apply the surrender charge as a percentage of the Purchase Payment, which means that you would pay the same surrender charge at the time of surrender regardless of whether your Contract Value has increased or decreased. The surrender charges associated with surrender or withdrawal are paid to us to compensate us for the loss we experience on contract distribution costs when Contractowners surrender or withdraw before distribution costs have been recovered.
There are charges associated with the surrender of a Contract or withdrawal of Contract Value. You may specify whether these charges are deducted from the amount you request to be withdrawn or from the remaining Contract Value. If the charges are deducted from the remaining Contract Value, the amount of the total withdrawal will increase according to the impact of the applicable surrender charge percentage; consequently, the dollar amount of the surrender charge associated with the withdrawal will also increase. In other words, the dollar amount deducted to cover the surrender charge is also subject to a surrender charge.
If the Contractowner is a corporation or other non-individual (non-natural person), the Annuitant or joint Annuitant will be considered the Contractowner or joint owner for purposes of determining when a surrender charge does not apply.
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Deductions for Premium Taxes
Any premium tax or other tax levied by any governmental entity as a result of the existence of the contracts will be deducted from the Contract Value, unless the governmental entity dictates otherwise, when incurred, or at another time of our choosing.
The applicable premium tax rates that states and other governmental entities impose on the purchase of an annuity are subject to change by legislation, by administrative interpretation or by judicial action. These premium tax rates generally depend upon the law of your state of residence. Currently, there is no premium tax levied for New York residents.
The Contracts
Purchase of Contracts
If you wish to purchase a Contract, you must apply for it through a registered representative authorized by us. The completed application is sent to us and we decide whether to accept or reject it. If the application is accepted, a Contract is prepared and executed by our legally authorized officers. The Contract is then sent to you either directly or through your registered representative. See Distribution of the Contracts. The purchase of multiple contracts with identical Contractowners, Annuitants and Beneficiaries will be allowed only upon Home Office approval.
Who Can Invest
To apply for a contract, you must be of legal age in a state where the contracts may be lawfully sold and also be eligible to participate in any of the qualified or nonqualified plans for which the contracts are designed. At the time of issue, the Contractowner, joint owner and Annuitant must be under age 86. Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account in an effort to help the government fight the funding of terrorism and money laundering activities. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license, photo i.d. or other identifying documents.
In accordance with anti-money laundering laws and federal economic sanction policy, the Company may be required in a given instance to reject a Purchase Payment and/or freeze a Contractowner’s account. This means we could refuse to honor requests for transfers, withdrawals, surrenders or Death Benefits. Once frozen, monies would be moved from the Indexed Account to an interest-bearing account maintained solely for the Contractowner, and held in that account until instructions are received from the appropriate regulator.
Do not purchase the Contract if you plan to use it, or any of its riders, for speculation, arbitrage, viatical arrangement, or other similar investment scheme. The Contract may not be resold, traded on any stock exchange, or sold on any secondary market.
If you are purchasing the Contract through a tax-favored arrangement, including traditional IRAs and Roth IRAs, you should consider carefully the costs and benefits of the Contract (including annuity income benefits) before purchasing the Contract, since the tax-favored arrangement itself provides tax-deferred growth.
Replacement of Existing Insurance
Careful consideration should be given prior to surrendering or withdrawing money from an existing insurance contract to purchase a Contract described in this prospectus. Surrender charges may be imposed on your existing contract and/or a new surrender charge period may be imposed with the purchase of, or transfer into, this Contract. The benefits offered under this Contract may be less favorable or more favorable than the benefits offered under your current contract. It also may have different charges. You should also consult with your registered representative and/or your tax advisor prior to making an exchange. Cash surrenders from an existing contract may be subject to tax and tax penalties.
Purchase Payment
The minimum Purchase Payment is $25,000. We do not accept additional Purchase Payments after the Contract has been issued to you. Accordingly, you will be unable to increase your Contract Value or Death Benefit by making subsequent Purchase Payments. If the Purchase Payment submitted does not meet the minimum amount, we will contact you to ask whether additional money will be sent, or whether we should return the Purchase Payment to you. Any funds received after 45 days from the date you signed your application (or submitted an electronic application) will be returned to you.
If we choose to extend that time period, the 45-day rate hold period will expire and the crediting rates currently in effect would apply. Any funds received after your Contract has been issued will be returned to you. You can find the crediting rates currently in effect at www.lfg.com/llarates or by calling us at 1-877-737-6872.
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You must obtain approval for a Purchase Payment totaling $1 million or more. This amount takes into consideration the total Purchase Payments for all existing Lincoln Level Advantage®, Lincoln Level Advantage 2® and Lincoln Level Advantage 2 IncomeSM contracts for the same Contractowner, joint owner, and/or Annuitant. At the Company’s discretion, this amount may consider total Purchase Payments for all annuity contracts issued by the Company (or its affiliates) for the same Contractowner, joint owner, and/or Annuitant.
Valuation Date
Indexed Segments will be valued once daily at the close of regular trading (normally, 4:00 p.m., Eastern Time) on each day the New York Stock Exchange is open (Valuation Date). On any date other than a Valuation Date, the value of the Indexed Segment will not change.
Allocation of the Purchase Payment
The Purchase Payment will be allocated, according to your instructions, among one or more of the Indexed Accounts available under your Contract. The minimum amount that may be allocated into an Indexed Account is $2,000.
The Contract effective date will be the date on which money is first applied to the Indexed Accounts to establish the initial Indexed Term and will be the Indexed Anniversary Date. After the Indexed Anniversary Date is established, that is the only date each year that allocations can be invested in the Indexed Accounts. Your Contract will be issued, at the earlier of, when the entire Purchase Payment is received or no later than the 45th calendar day after the date you signed your application (or submitted an electronic application), provided the minimum Purchase Payment requirement was met. All funds received on or prior to the Contract effective date will be considered your Purchase Payment.
If the last day to issue your contract is not a business day, the Contract effective date and the initial Indexed Value for your Indexed Segments will be the closing value of the next Valuation Date. Excluding February 29th, any calendar date can be a Contract Date, Indexed Anniversary Date, or Valuation Date.
The rates for the initial Indexed Segments you selected will be determined based on any applicable crediting rate hold restrictions. For current crediting rate hold restrictions please call us at 1-877-737-6872. Current rates are available on our website at www.lfg.com/llarates.
Telephone and Electronic Transactions
A surrender, withdrawal, or reallocation request may be made to our Servicing Office in writing or by fax. These transactions may also be made by telephone or other electronic means, provided the appropriate authorization is on file with us. In order to prevent unauthorized or fraudulent transfers, we may require certain identifying information before we will act upon instructions. We may also assign the Contractowner a Personal Identification Number (PIN) to serve as identification. We will not be liable for following instructions we reasonably believe are genuine. Telephone and other electronic requests will be recorded and written confirmation of all transactions will be mailed or sent electronically to the Contractowner on the next Valuation Date.
Please note that the telephone and/or electronic devices may not always be available. Any telephone, fax machine, or other electronic device, whether it is yours, your service provider’s, or your registered representative’s, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request by writing to our Servicing Office.
Ownership
The Contractowner on the date of issue will be the person or entity designated in the contract specifications. The Contractowner of a nonqualified contract may name a joint owner. We reserve the right to limit certain types of ownership structures. Please contact your financial professional for more information.
As Contractowner, you have all rights under the Contract. We reserve the right to approve all ownership and Annuitant changes. A transfer of ownership, or a revocation of transfer, must be provided in a notice to the Servicing Office. When a notice to transfer or revocation is received, any allowable change will take effect as of the date the notice was signed by the Owner, unless otherwise specified by the Owner. The change in ownership is subject to any payments made or any action taken or allowed by us before the transfer or the revocation is received.
This Contract may be assigned or transferred. We will not be bound by any assignment unless notice of the assignment is provided at the Servicing Office. The effective date of the assignment will be the date it is signed by the Owner unless otherwise specified by the Owner. The change is subject to any payments made or actions taken or allowed by us before the assignment is received. We will not be responsible for the validity of any assignment.
Nonqualified contracts may not be sold, discounted, or pledged as collateral for a loan or for any other purpose. Qualified contracts are not transferable unless allowed under applicable law. Nonqualified contracts may not be collaterally assigned. Assignments may
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have an adverse impact on your Death Benefits and may be prohibited under the terms of a particular feature. We assume no responsibility for the validity or effect of any assignment. Consult your tax advisor about the tax consequences of an assignment.
Joint Ownership
If a Contract has joint owners, the joint owners shall be treated as having equal undivided interests in the Contract. Either owner, independently of the other, may exercise any ownership rights in this Contract. Not more than two owners (an owner and joint owner) may be named and contingent owners are not permitted.
Annuitant
The following rules apply prior to the Annuity Commencement Date. You may name only one Annuitant (unless you are a tax-exempt entity, then you can name two joint Annuitants). You (if the Contractowner is a natural person) have the right to change the Annuitant at any time by notifying us in writing of the change. However, we reserve the right to approve all Annuitant changes. This may not be allowed if certain riders are in effect. The new Annuitant must be under age 86 as of the effective date of the change. A contingent Annuitant may be named or changed by notifying us in writing. Contingent Annuitants are not allowed on contracts owned by non-natural owners. On or after the Annuity Commencement Date, the Annuitant or joint Annuitants may not be changed and contingent Annuitant designations are no longer applicable.
Surrenders and Withdrawals
Before the Annuity Commencement Date, we will allow the surrender of the Contract or a withdrawal of the Contract Value upon your written request on an approved Lincoln distribution request form (available from the Servicing Office), fax, or other electronic means approved by Lincoln. Withdrawal requests may be made by telephone, subject to certain restrictions. All surrenders and withdrawals may be made in accordance with the rules discussed below. Surrender or withdrawal rights after the Annuity Commencement Date are not available.
The amount available upon surrender/withdrawal is the Contract Value less any applicable charges, fees, and taxes at the end of the Valuation Period during which the written request for surrender/withdrawal is received in Good Order at the Servicing Office. If we receive a surrender or withdrawal request in Good Order at our Servicing Office before the close of the NYSE (normally 4:00 p.m., Eastern Time), we will process the request from the Interim Value computed on that Valuation Date. If we receive a surrender or withdrawal request in Good Order at our Servicing Office after market close, we will process the request using the Interim Value computed on the next Valuation Date. There may be circumstances under which the NYSE may close early (prior to 4:00 p.m., Eastern Time). In such instances, surrender or withdrawal requests received after such early market close will be processed using the Interim Value computed on the next Valuation Date. The minimum amount which can be withdrawn is $300. Unless a request for withdrawal specifies otherwise, withdrawals will be made proportionately in the following order:
proportionately from Indexed Segments with a one year term (if any);
proportionately from Indexed Segments with a term greater than one year.
Prior to the End Date of the Indexed Segment, an amount equal to the Interim Value of the Indexed Segment is available for surrender or withdrawal. In addition, the Indexed Crediting Base for each individual Indexed Segment is reduced proportionately by the amount that the withdrawal reduced the Interim Value. A proportional reduction could be larger than the dollar amount of the withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Segment Ending Value at the end of the Indexed Term. You cannot withdraw an amount equal to the Indexed Crediting Base. The following examples show how Indexed the Crediting Base is impacted by a withdrawal.
Example 1:
1/1/2026 Allocation to Indexed Segment = $80,000
1/1/2026 Indexed Crediting Base = $80,000
6/1/2026 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Ending Value will be based on the $16,000 Indexed Crediting Base
1/1/2026 Indexed Crediting Base = $80,000
6/1/2026 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Ending Value will be based on the $16,000 Indexed Crediting Base
Example 2:
Indexed Crediting Base = $16,000; Interim Value = $15,000; Withdrawal = $15,000 (including any applicable surrender charge)
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
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Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Note: The $15,000 Interim Value is the maximum that could be withdrawn during the Indexed Term. The Crediting Base is not available for withdrawal or transfer.
There may be surrender charges associated with surrender of a Contract or withdrawal of Contract Value. You may specify whether these charges are deducted from the amount you request to be withdrawn or from the remaining Contract Value. If the charges are deducted from the remaining Contract Value, the amount of the total withdrawal will increase according to the impact of the applicable surrender charge percentage; consequently, the dollar amount of the surrender charge associated with the withdrawal will also increase. In other words, the dollar amount deducted to cover the surrender charge is also subject to a surrender charge. See Surrender Charge.
The tax consequences of a surrender/withdrawal are discussed later in this prospectus. See Federal Tax Matters – Taxation of Withdrawals and Surrenders.
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Standard Benefits | |||
|
Name of Benefit |
Purpose |
Maximum Fee |
Brief Description of Restrictions /
Limitations |
|
|
|
|
|
|
|
|
|
|
|
upon death of: |
and... |
and... |
Death Benefit proceeds pass to: |
|
Contractowner |
There is a surviving joint owner |
The Annuitant is living or deceased |
Joint owner |
|
Contractowner |
There is no surviving joint owner |
The Annuitant is living or deceased |
Designated Beneficiary |
|
Contractowner |
There is no surviving joint owner
and the Beneficiary predeceases the
Contractowner |
The Annuitant is living or deceased |
Contractowner's estate |
|
Annuitant |
The Contractowner is living |
There is no contingent Annuitant |
The youngest Contractowner
becomes the contingent Annuitant
and the Contract continues. The
Contractowner may waive* this
continuation and receive the Death
Benefit proceeds. |
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|
upon death of: |
and... |
and... |
Death Benefit proceeds pass to: |
|
Annuitant |
The Contractowner is living |
The contingent Annuitant is living |
Contingent Annuitant becomes the
Annuitant and the Contract
continues |
|
Annuitant** |
The Contractowner is a trust or
other non-natural person |
No contingent Annuitant allowed
with non-natural Contractowner |
Designated Beneficiary |
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Abandoned Property. Every state has unclaimed property laws which generally declare annuity contracts to be abandoned after a period of inactivity of three to five years from the date a benefit is due and payable. For example, if the payment of a Death Benefit has been triggered, but, if after a thorough search, we are still unable to locate the Beneficiary of the Death Benefit, or the Beneficiary does not come forward to claim the Death Benefit in a timely manner, the Death Benefit will be “escheated”. This means that the Death Benefit will be paid to the abandoned property division or unclaimed property office of the state in which the Beneficiary or the Contractowner last resided, as shown on our books and records, or to our state of domicile. This escheatment is revocable and the state is obligated to pay the Death Benefit (without interest) if your Beneficiary steps forward to claim it with the proper documentation.
To prevent such escheatment, it is important that you update your Beneficiary designations, including addresses, if and as they change. You may update your Beneficiary designations by submitting a Beneficiary change form to our Servicing Office.
Additional Service
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Annuity Payouts
Your Contract Value invested in the Indexed Accounts must be transferred to a fixed Annuity Payout prior to the Annuity Commencement Date. See Principal Risks of Investing in the Contract. When you apply for a Contract, you may select any Annuity Commencement Date permitted by law, which is usually on or before the Annuitant's 99th birthday. Your registered representative may recommend that you annuitize at an earlier age.
The Contract provides optional forms of payouts of annuities (annuity options). The Indexed Accounts are not available as Annuity Payout options. The Contract provides that all of the Contract Value may be used to purchase an Annuity Payout option.
You may elect Annuity Payouts in monthly, quarterly, semiannual or annual installments. Following are explanations of the annuity options available.
Annuity Options
Life Annuity. This option offers a periodic payout during the lifetime of the Annuitant and ends with the last payout before the death of the Annuitant. This option offers the highest periodic payout since there is no guarantee of a minimum number of payouts or provision for a Death Benefit for Beneficiaries. However, there is the risk under this option that the recipient would receive no payouts if the Annuitant dies before the date set for the first payout; only one payout if death occurs before the second scheduled payout, and so on.
Life Annuity with Period Certain. This option guarantees periodic payouts during a designated period, usually 10 or 20 years, and then continues throughout the lifetime of the Annuitant. The designated period is selected by the Contractowner.
Joint Life Annuity. This option offers a periodic payout during the joint lifetime of the Annuitant and a designated joint Annuitant. The payouts continue during the lifetime of the survivor. However, under a joint life annuity, if both Annuitants die before the date set for the first payout, no payouts will be made. Only one payment would be made if both deaths occur before the second scheduled payout, and so on.
Joint Life Annuity with Period Certain. This option guarantees periodic payouts during a designated period, usually 10 or 20 years, and continues during the joint lifetime of the Annuitant and a designated joint Annuitant. The payouts continue during the lifetime of the survivor. The designated period is selected by the Contractowner.
Joint Life and Two Thirds to Survivor Annuity. This option provides a periodic payout during the joint lifetime of the Annuitant and a designated joint Annuitant. When one of the joint Annuitants dies, the survivor receives two thirds of the periodic payout made when both were alive.
Joint Life and Two-Thirds Survivor Annuity with Period Certain. This option provides a periodic payout during the joint lifetime of the Annuitant and a designated joint Annuitant. When one of the joint Annuitants dies, the survivor receives two-thirds of the periodic payout made when both were alive. This option further provides that should one or both of the Annuitants die during the elected guaranteed period, usually 10 or 20 years, full benefit payment will continue for the rest of the guaranteed period.
Life Annuity with Cash Refund. This option provides fixed annuity benefit payments that will be made for the lifetime of the Annuitant with the guarantee that upon death, should (a) the total dollar amount applied to purchase this option be greater than (b) the fixed annuity benefit payment multiplied by the number of annuity benefit payments paid prior to death, then a refund payment equal to the dollar amount of (a) minus (b) will be made.
Under the annuity options listed above, you may not make withdrawals. Other options, with or without withdrawal features, may be made available by us. You may pre-select an Annuity Payout option as a method of paying the Death Benefit to a Beneficiary. If you do, the Beneficiary cannot change this payout option. You may change or revoke in writing to our Servicing Office, any such selection, unless such selection was made irrevocable. If you have not already chosen an Annuity Payout option, the Beneficiary may choose any Annuity Payout option. At death, options are only available to the extent they are consistent with the requirements of the Contract as well as Sections 72(s) and 401(a)(9) of the tax code, if applicable.
General Information
Any previously selected Death Benefit in effect before the Annuity Commencement Date will no longer be available on and after the Annuity Commencement Date. Any portion of your Contract Value invested in the Indexed Accounts must be moved to a fixed Annuity Payout prior to the Annuity Commencement Date. You may change the Annuity Commencement Date or change the annuity option up to 30 days before the scheduled Annuity Commencement Date, upon written notice to the Home Office. You must give us at least 30 days’ notice before the date on which you want payouts to begin. We may require proof of age, sex, or survival of any payee upon whose age, sex, or survival payments depend.
Unless you select another option, the Contract automatically provides for a life annuity with Annuity Payouts guaranteed for 10 years (on a fixed basis) except when a joint life payout is required by law. Under any option providing for guaranteed period payouts, the number of payouts which remain unpaid at the date of the Annuitant’s death (or surviving Annuitant’s death in case of joint life Annuity) will be paid to you or your Beneficiary as payouts become due after we are in receipt of:
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proof of the death, satisfactory to us;
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written authorization for payment; and
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all claim forms, fully completed.
Small Contract Surrenders
We may surrender your Contract, in accordance with New York law if:
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your Contract Value drops below certain state specified minimum amounts ($2,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Indexed Accounts you selected; and
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the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month.
At least 60 days before we surrender your Contract, we will send you a letter at your last address we have on file, to inform you that your Contract will be surrendered. If we surrender your Contract, we will not assess any surrender charge. Surrenders from the Indexed Accounts will be calculated using the Interim Value.
Delay of Payments
Due to federal laws designed to counter terrorism and prevent money laundering by criminals, we may be required to reject a Purchase Payment and/or deny payment of a request for transfers, withdrawals, surrenders, or Death Benefits, until instructions are received from the appropriate regulator. We also may be required to provide additional information about a Contractowner's account to government regulators.
Amendment of Contract
We reserve the right to amend the Contract to meet the requirements of applicable federal or state laws or regulations. You will be notified in writing of any changes, modifications or waivers. Any changes are subject to prior approval of your state’s insurance department (if required).
Distribution of the Contracts
Lincoln Financial Distributors, Inc. (“LFD”) serves as Principal Underwriter of this Contract. LFD is affiliated with Lincoln New York and is registered as a broker-dealer with the SEC under the Securities Exchange Act of 1934 and is a member of FINRA (Financial Industry Regulatory Authority). The Principal Underwriter has entered into selling agreements with broker-dealers that are unaffiliated with us (“Selling Firms”). While the Principal Underwriter has the legal authority to make payments to broker-dealers which have entered into selling agreements, we will make such payments on behalf of the Principal Underwriter in compliance with appropriate regulations. We also pay on behalf of LFD certain of its operating expenses related to the distribution of this and other of our contracts. The Principal Underwriter may also offer “non-cash compensation”, as defined under FINRA’s rules, which includes among other things, merchandise, gifts, marketing support, sponsorships, seminars, entertainment and travel expenses. You should ask your registered representative how the broker-dealer will be compensated for the sale of the Contract to you, or for any alternative proposal that may have been presented to you. You should take such compensation into account when considering and evaluating any recommendation made to you in connection with the purchase of a Contract. The following paragraphs describe how payments are made by us and the Principal Underwriter to various parties.
Compensation Paid to Selling Firms. The Principal Underwriter pays commissions to all Selling Firms. The maximum commission the Principal Underwriter pays to Selling Firms is 6.00% of the Purchase Payment. Some Selling Firms may elect to receive a lower commission when a Purchase Payment is made along with an earlier quarterly payment based on Contract Value for so long as the Contract’s Selling Firm remains in effect. Upon annuitization, the maximum commission the Principal Underwriter pays to Selling Firms is 3.00% of annuitized value and/or ongoing annual compensation of up to 0.40% of annuity value or statutory reserves. LFD also acts as wholesaler of the contracts and performs certain marketing and other functions in support of the distribution and servicing of the contracts.
LFD may pay certain Selling Firms or their affiliates additional amounts for, among other things: (1) “preferred product” treatment of the contracts in their marketing programs, which may include marketing services and increased access to registered representatives; (2) sales incentives relating to the contracts; (3) costs associated with sales conferences and educational seminars for their registered representatives; (4) other sales expenses incurred by them; and (5) inclusion in the financial products the Selling Firm offers.
Lincoln New York may provide loans to broker-dealers or their affiliates to help finance marketing and distribution of the contracts, and those loans may be forgiven if aggregate sales goals are met. In addition, we may provide staffing or other administrative support and services to broker-dealers who distribute the contracts. LFD, as wholesaler, may make bonus payments to certain Selling Firms based on aggregate sales of our variable insurance contracts (including the contracts) or persistency standards.
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These additional types of compensation are not offered to all Selling Firms. The terms of any particular agreement governing compensation may vary among Selling Firms and the amounts may be significant. The prospect of receiving, or the receipt of, additional compensation may provide Selling Firms and/or their registered representatives with an incentive to favor sales of the contracts over other variable annuity contracts (or other investments) with respect to which a Selling Firm receives lower levels of or no additional compensation. You may wish to take such payment arrangements into account when considering and evaluating any recommendation relating to the contracts.
Compensation Paid to Other Parties. Depending on the particular selling arrangements, there may be others whom LFD compensates for the distribution activities. For example, LFD may compensate certain “wholesalers”, who control access to certain selling offices, for access to those offices or for referrals, and that compensation may be separate from the compensation paid for sales of the contracts. LFD may compensate marketing organizations, associations, brokers or consultants which provide marketing assistance and other services to broker-dealers who distribute the contracts, and which may be affiliated with those broker-dealers. Commissions and other incentives or payments described above are not charged directly to Contractowners. All compensation is paid from our resources, which include fees and charges imposed on your Contract.
We pay an education and support fee to First Trust Portfolios L.P. (First Trust) for their educational and sales support in connection with the First Trust Capital Strength Methodology contained within the Capital Strength Net Fee IndexSM. This fee is an annual fee of 0.15% of the average daily value of the amount invested in the Capital Strength Indexed Accounts. First Trust will pay Lincoln an annual rate of 0.05% of the average daily value of the amount invested in the Capital Strength Indexed Accounts to compensate Lincoln for the expenses it incurs in assisting First Trust as it provides this education and support. These payments are not charged directly to Contractowners, but are paid from our resources.
We pay a licensing fee to FTIS in the amount of 0.045%, and we pay an education and support fee in the amount of 0.150% to First Trust Portfolios L.P. in connection with the First Trust American Leadership Index. These fees are based on the average monthly value of the amount invested in the First Trust American Leadership Indexed Accounts. These payments are not charged directly to Contractowners but are paid from our resources.
Contractowner Questions
The obligations to purchasers under the contracts are those of Lincoln New York. This prospectus provides a general description of the material features of the Contract. Contracts, endorsements and riders may vary as required by state law. Questions about your Contract should be directed to us at 1-877-737-6872.
Federal Tax Matters
Introduction
The Federal income tax treatment of the Contract is complex and sometimes uncertain. The Federal income tax rules may vary with your particular circumstances. This discussion does not include all the Federal income tax rules that may affect you and your Contract. This discussion also does not address other Federal tax consequences (including consequences of sales to foreign individuals or entities), or state or local tax consequences, associated with the Contract. As a result, you should always consult a tax advisor about the application of tax rules found in the Internal Revenue Code (“Code”), Treasury Regulations and applicable IRS guidance to your individual situation.
Nonqualified Annuities
This part of the discussion describes some of the Federal income tax rules applicable to nonqualified annuities. A nonqualified annuity is a contract not issued in connection with a qualified retirement plan, such as an IRA or a section 403(b) plan, receiving special tax treatment under the Code. We may not offer nonqualified annuities for all of our annuity products.
Tax Deferral On Earnings
Under the Code, you are generally not subject to tax on any increase in your Contract Value until you receive a contract distribution. However, for this general rule to apply, certain requirements must be satisfied:
●
An individual must own the Contract (or the Code must treat the Contract as owned by an individual).
●
Your right to choose particular investments for a Contract must be limited.
●
The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy.
Contracts Not Owned By An Individual
If a Contract is owned by an entity (rather than an individual) the Code generally does not treat it as an annuity contract for Federal income tax purposes. This means that the entity owning the Contract pays tax currently on the excess of the Contract Value over the
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investment in the Contract. Examples of contracts where the owner pays current tax on the Contract’s earnings are contracts issued to a corporation or a trust. Some exceptions to the rule are:
●
Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees;
●
Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period;
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Contracts acquired by an estate of a decedent;
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Certain qualified contracts;
●
Contracts purchased by employers upon the termination of certain qualified plans; and
●
Certain contracts used in connection with structured settlement agreements.
Restrictions
The Code limits your right to choose particular investments for the Contract. Because the IRS has issued little guidance specifying those limits, the limits are uncertain. We do not know what limits may be set by the IRS in any guidance that it may issue and whether any such limits will apply to existing contracts.
Loss Of Interest Deduction
After June 8, 1997, if a Contract is issued to a taxpayer that is not an individual, or if a Contract is held for the benefit of an entity, the entity may lose a portion of its deduction for otherwise deductible interest expenses. However, this rule does not apply to a Contract owned by an entity engaged in a trade or business that covers the life of one individual who is either (i) a 20% Owner of the entity, or (ii) an officer, director, or employee of the trade or business, at the time first covered by the Contract. This rule also does not apply to a Contract owned by an entity engaged in a trade or business that covers the joint lives of the 20% Owner or the entity and the Owner’s spouse at the time first covered by the Contract.
Age At Which Annuity Payouts Begin
The Code does not expressly identify a particular age by which Annuity Payouts must begin. However, those rules do require that an annuity contract provide for amortization, through Annuity Payouts, of the Contract’s Purchase Payment and earnings. As long as annuity payments begin or are scheduled to begin on a date on which the Annuitant’s remaining life expectancy is enough to allow for a sufficient Annuity Payout period, the Contract should be treated as an annuity. If the annuity contract is not treated as an annuity, you would be currently taxed on the excess of the Contract Value over the investment in the Contract.
Tax Treatment Of Payments
We make no guarantees regarding the tax treatment of any Contract or of any transaction involving a Contract. However, the rest of this discussion assumes that your Contract will be treated as an annuity under the Code and that any increase in your Contract Value will not be taxed until there is a distribution from your Contract.
Taxation Of Withdrawals And Surrenders
You will pay tax on withdrawals to the extent your Contract Value exceeds your investment in the Contract. This income (and all other income from your Contract) is considered ordinary income (and does not receive capital gains treatment and is not qualified dividend income). You will pay tax on a surrender to the extent the amount you receive exceeds your investment in the Contract. In certain circumstances, your Purchase Payment and investment in the Contract are reduced by amounts received from your Contract that were not included in income.
Taxation Of Annuity Payouts
The Code imposes tax on a portion of each Annuity Payout (at ordinary income tax rates) and treats a portion as a nontaxable return of your investment in the Contract. We will notify you annually of the taxable amount of your Annuity Payout. Once you have recovered the total amount of the investment in the Contract, you will pay tax on the full amount of your Annuity Payouts. If Annuity Payouts end because of the Annuitant’s death and before the total amount in the Contract has been distributed, the amount not received will generally be deductible.
Taxation Of Death Benefits
We may distribute amounts from your Contract because of the death of a Contractowner or an Annuitant. The tax treatment of these amounts depends on whether the Contractowner or the Annuitant dies before or after the Annuity Commencement Date.
Death prior to the Annuity Commencement Date:
●
If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts.
●
If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal.
44
Death after the Annuity Commencement Date:
●
If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner.
●
If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income.
●
If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of the Purchase Payment not previously received.
Additional Taxes Payable On Withdrawals, Surrenders, Or Annuity Payouts
The Code may impose a 10% additional tax on any distribution from your Contract which you must include in your gross income. The 10% additional tax does not apply if one of several exceptions exists. These exceptions include withdrawals, surrenders, or Annuity Payouts that:
●
you receive on or after you reach 59½,
●
you receive because you became disabled (as defined in the Code),
●
you receive from an immediate annuity,
●
a Beneficiary receives on or after your death, or
●
you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify).
Unearned Income Medicare Contribution
Congress enacted the “Unearned Income Medicare Contribution” as a part of the Health Care and Education Reconciliation Act of 2010. This tax, which affects individuals whose modified adjusted gross income exceeds certain thresholds, is a 3.8% tax on the lesser of (i) the individual's “unearned income,” or (ii) the dollar amount by which the individual's modified adjusted gross income exceeds the applicable threshold. Unearned income includes the taxable portion of distributions that you take from your annuity contract. If you take a distribution from your Contract that may be subject to the tax, we will include a Distribution Code “D” in Box 7 of the Form 1099-R issued to report the distribution. Please consult your tax advisor to determine whether your annuity distributions are subject to this tax.
Special Rules If You Own More Than One Annuity Contract
In certain circumstances, you must combine some or all of the nonqualified annuity contracts you own in order to determine the amount of an Annuity Payout, a surrender, or a withdrawal that you must include in income. For example, if you purchase two or more deferred annuity contracts from the same life insurance company (or its affiliates) during any calendar year, the Code treats all such contracts as one contract. Treating two or more contracts as one contract could affect the amount of a surrender, a withdrawal or an Annuity Payout that you must include in income and the amount that might be subject to the additional tax described previously.
Loans and Assignments
Except for certain qualified contracts, the Code treats any amount received as a loan under your Contract, and any assignment or pledge (or agreement to assign or pledge) of any portion of your Contract Value, as a withdrawal of such amount or portion.
Gifting A Contract
If you transfer ownership of your Contract to a person other than to your spouse (or to your former spouse incident to divorce), and receive a payment less than your Contract’s value, you will pay tax on your Contract Value to the extent it exceeds your investment in the Contract not previously received. The new owner’s investment in the Contract would then be increased to reflect the amount included in income.
Charges for Additional Benefits
Your Contract automatically includes a basic Death Benefit and may include other optional riders. Certain enhancements to the basic Death Benefit may also be available to you. The cost of the basic Death Benefit and any additional benefit are deducted from your Contract. It is possible that the tax law may treat all or a portion of the Death Benefit and other optional rider charges, if any, as a contract withdrawal.
Special Considerations for Same-Sex Spouses
In 2013, the U.S. Supreme Court held that same-sex spouses who are married under state law are treated as spouses for purposes of federal law. You are strongly encouraged to consult a tax advisor before electing spousal rights under the Contract.
45
Qualified Retirement Plans
We have designed the contracts for use in connection with certain types of retirement plans that receive favorable treatment under the Code. Contracts issued to or in connection with a qualified retirement plan are called “qualified contracts.” We issue contracts for use with various types of qualified retirement plans. The Federal income tax rules applicable to those plans are complex and varied. As a result, this prospectus does not attempt to provide more than general information about the use of the Contract with the various types of qualified retirement plans. Persons planning to use the Contract in connection with a qualified retirement plan should obtain advice from a competent tax advisor.
Types of Qualified Contracts and Terms of Contracts
Qualified retirement plans may include the following:
●
Individual Retirement Accounts and Annuities (“Traditional IRAs”)
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Roth IRAs
●
Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”)
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SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees)
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401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans)
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403(a) plans (qualified annuity plans)
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403(b) plans (public school system and tax-exempt organization annuity plans)
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H.R. 10 or Keogh Plans (self-employed individual plans)
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457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations)
Our individual variable annuity products are not available for use with any of the foregoing qualified retirement plan accounts, with the exception of Traditional IRA, SEP IRA, and Roth IRA arrangements. We will amend contracts to be used with a qualified retirement plan as generally necessary to conform to the Code’s requirements for the type of plan. However, the rights of a person to any qualified retirement plan benefits may be subject to the plan’s terms and conditions, regardless of the contract’s terms and conditions. In addition, we are not bound by the terms and conditions of qualified retirement plans to the extent such terms and conditions contradict the contract, unless we consent.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019
The Setting Every Community Up for Retirement Enhancement (SECURE) Act (the “SECURE Act”) was enacted on December 20, 2019. The SECURE Act made a number of significant changes to the rules that apply to qualified retirement plans and IRA’s, including the following:
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Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age.
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Changed the required minimum distribution rules that apply after the death of a participant or IRA owner.
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Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions.
The Setting Every Community Up for Retirement Enhancement 2.0 (SECURE 2.0) Act of 2022
The Setting Every Community Up for Retirement Enhancement (SECURE 2.0) Act (the “SECURE 2.0 Act”) was enacted on December 29, 2022. The SECURE 2.0 Act made specific changes to retirement plans and IRA’s, including:
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Increased the required beginning date measuring age from age 72 to 73 for any participant or IRA owner who did not attain age 72 prior to January 1, 2023. As a result, required minimum distributions are generally required to begin by April 1st of the year following the year in which the participant or IRA owner reaches age 73.
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Further increased the required beginning date measuring age to 75 by 2033.
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Created exception to the 10% additional tax for distributions for domestic violence and emergencies.
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Added provisions that permit rollover of 529 plan amounts to a Roth IRA for the beneficiary, within certain limits.
Tax Treatment of Qualified Contracts
The Federal income tax rules applicable to qualified retirement plans and qualified contracts vary with the type of plan and contract. For example:
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Federal tax rules limit the amount of the Purchase Payment or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation).
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Minimum annual distributions are required under some qualified retirement plans once you reach age 73 or retire, if later as described below.
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Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit
46
loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans.
Please note that qualified retirement plans such as 403(b) plans, 401(k) plans and IRAs generally defer taxation of contributions and earnings until distribution. As such, an annuity does not provide any additional tax deferral benefit beyond the qualified retirement plan itself.
Tax Treatment of Payments
The Federal income tax rules generally include distributions from a qualified contract in the participant’s income as ordinary income. These taxable distributions will include contributions that were deductible or excludible from income. Thus, under many qualified contracts, the total amount received is included in income since a deduction or exclusion from income was taken for contributions to the contract. There are exceptions. For example, you do not include amounts received from a Roth IRA in income if certain conditions are satisfied.
Required Minimum Distributions
Under most qualified plans, you must begin receiving payments from the Contract in certain minimum amounts by your “required beginning date”. Prior to the SECURE 2.0 Act, the required beginning date was April 1 of the year following the year you attain age 72 or retired. If you did not attain age 72 prior to January 1, 2023, then your required beginning date will be April 1st of the year following the year in which you attain age 73 or retire. If you own a traditional IRA, your required beginning date under prior law was April 1st of the year following the year in which you attained age 72. If you did not attain age 72 prior to January 1, 2023, then your required beginning date will be April 1st of the year following the year in which you attain age 73. If you own a Roth IRA, you are not required to receive minimum distributions from your Roth IRA during your life.
Failure to comply with the minimum distribution rules applicable to certain qualified plans, such as Traditional IRAs, will result in the imposition of an excise tax. This excise tax is applied to the amount by which a required minimum distribution exceeds the actual distribution from the qualified plan.
Treasury regulations applicable to required minimum distributions include a rule that may impact the distribution method you have chosen and the amount of your distributions. Under these regulations, the presence of an enhanced Death Benefit, or other benefit which could provide additional value to your Contract, may require you to take additional distributions. An enhanced Death Benefit is any Death Benefit that has the potential to pay more than the Contract Value or a return of investment in the Contract. Annuity contracts inside Custodial or Trusteed IRAs will also be subject to these regulations. Please contact your tax advisor regarding any tax ramifications.
Additional Tax on Early Distributions from Qualified Retirement Plans
The Code may impose a 10% additional tax on an early distribution from a qualified contract that must be included in income. The Code does not impose the additional tax if one of several exceptions applies. The exceptions vary depending on the type of qualified contract you purchase. For example, in the case of an IRA, the 10% additional tax will not apply to any of the following withdrawals, surrenders, or Annuity Payouts:
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Distribution received on or after the Annuitant reaches 59½,
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Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code),
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Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy),
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Distribution received as reimbursement for certain amounts paid for medical care, or
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Distribution received for a “qualified birth or adoption” event.
These exceptions, as well as certain others not described here, generally apply to taxable distributions from other qualified retirement plans. However, the specific requirements of the exception may vary.
Unearned Income Medicare Contribution
Congress enacted the “Unearned Income Medicare Contribution” as a part of the Health Care and Education Reconciliation Act of 2010. This tax affects individuals whose modified adjusted gross income exceeds certain thresholds, is a 3.8% tax on the lesser of (i) the individual’s “unearned income,” or (ii) the dollar amount by which the individual’s modified adjusted gross income exceeds the applicable threshold. Distributions that you take from your Contract are not included in the calculation of unearned income because your Contract is a qualified plan contract. However, the amount of any such distribution is included in determining whether you exceed the modified adjusted gross income threshold. Please consult your tax advisor to determine whether your annuity distributions are subject to this tax.
Transfers and Direct Rollovers
As a result of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), you may be able to move funds between different types of qualified plans, such as 403(b) and 457(b) governmental plans, by means of a rollover or transfer. You may be able
47
to rollover or transfer amounts between qualified plans and traditional IRAs. These rules do not apply to Roth IRAs and 457(b) non-governmental tax-exempt plans. There are special rules that apply to rollovers, direct rollovers and transfers (including rollovers or transfers of after-tax amounts). If the applicable rules are not followed, you may incur adverse Federal income tax consequences, including paying taxes which you might not otherwise have had to pay. Before we send a rollover distribution, we will provide a notice explaining tax withholding requirements (see Federal Income Tax Withholding). We are not required to send you such notice for your IRA. You should always consult your tax advisor before you move or attempt to move any funds.
The IRS issued Announcement 2014-32 confirming its intent to apply the one-rollover-per-year limitation of 408(d)(3)(B) on an aggregate basis to all IRAs that an individual owns. This means that an individual cannot make a tax-free IRA-to-IRA rollover if he or she has made such a rollover involving any of the individual’s IRAs in the current tax year. If an intended rollover does not qualify for tax-free rollover treatment, contributions to your IRA may constitute excess contributions that may exceed contribution limits. This one-rollover-per-year limitation does not apply to direct trustee-to-trustee transfers.
Direct Conversions and Recharacterizations
The Pension Protection Act of 2006 (PPA) permits direct conversions from certain qualified, retirement, 403(b) or 457(b) plans to Roth IRAs (effective for distributions after 2007). You are also permitted to recharacterize your traditional IRA contribution as a Roth IRA contribution, and to recharacterize your Roth IRA contribution as a traditional IRA contribution. The deadline for the recharacterization is the due date (including extensions) for your individual income tax return for the year in which the contribution was made. Upon recharacterization, you are treated as having made the contribution originally to the second IRA account. The recharacterization does not count toward the one-rollover-per-year limitation described above.
Effective for tax years beginning after December 31, 2017, pursuant to the Tax Cuts and Jobs Act (Pub. L. No. 115-97), recharacterizations are no longer allowed in the case of a conversion from a non-Roth account or annuity to a Roth IRA. This limitation applies to conversions made from pre-tax accounts under an IRA, qualified retirement plan, 403(b) plan, or 457(b) plan. Roth IRA conversions made in 2017 may be recharacterized as a contribution to a traditional IRA if the recharacterization is completed by October 15, 2018.
There are special rules that apply to conversions and recharacterizations, and if they are not followed, you may incur adverse Federal income tax consequences. You should consult your tax advisor before completing a conversion or recharacterization.
Death Benefit and IRAs
Pursuant to Treasury regulations, IRAs may not invest in life insurance contracts. We do not believe that these regulations prohibit the Death Benefit from being provided under the Contract when we issue the Contract as a Traditional or Roth IRA. However, the law is unclear and it is possible that the presence of the Death Benefit under a Contract issued as a Traditional or Roth IRA could result in increased taxes to you. Certain Death Benefit options may not be available for all of our products.
Federal Income Tax Withholding
We will withhold and remit to the IRS a part of the taxable portion of each distribution made under a Contract unless you notify us in writing prior to the distribution that tax is not to be withheld. In certain circumstances, Federal income tax rules may require us to withhold tax. At the time a withdrawal, surrender, or Annuity Payout is requested, we will give you an explanation of the withholding requirements.
Certain payments from your Contract may be considered eligible rollover distributions (even if such payments are not being rolled over). Such distributions may be subject to special tax withholding requirements. The Federal income tax withholding rules require that we withhold 20% of the eligible rollover distribution from the payment amount, unless you elect to have the amount directly transferred to certain qualified plans or contracts. The IRS requires that tax be withheld, even if you have requested otherwise. Such tax withholding requirements are generally applicable to 401(a), 403(a) or (b), HR 10, and 457(b) governmental plans and contracts used in connection with these types of plans.
Changes in the Law
The above discussion is based on the Code, related regulations, and interpretations existing on the date of this prospectus. However, Congress, the IRS, and the courts may modify these authorities, sometimes retroactively.
Additional Information
Voting Rights
There are no voting rights associated with the Indexed Accounts.
48
Return Privilege
Within the free-look period after you receive the Contract, you may cancel it for any reason by sending us a letter of instruction, indicating your intent to exercise the free-look provision. A Contract canceled under this provision will be void. Except as explained in the following paragraph, we will return the greater of a full refund of the amount you paid with your application or your total Contract Value. No applicable surrender charges will apply. A purchaser who participates in the Indexed Accounts risks the loss of principal as it will be based on Interim Value.
IRA purchasers will receive the greater of Purchase Payments or Contract Value as of the Valuation Date on which we receive the cancellation request.
If you cancel this Contract within the free-look period, we reserve the right not to accept another application for this Contract for a period of six months.
State Regulation
As a life insurance company organized and operated under New York law, we are subject to provisions governing life insurers and to regulation by the New York Commissioner of Insurance. Our books and accounts are subject to review and examination by the New York State Department of Financial Services at all times. A full examination of our operations is conducted by that Department at least every five years.
Reliance On Rule 12h-7
We rely on the exemption from the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), provided by Rule 12h-7 under the 1934 Act with respect to registered non-variable insurance contracts (such as the Contract) that we issue.
Electronic Delivery
You may elect to receive your Contract, prospectus, prospectus supplements, quarterly statements, and other notices electronically over the Internet, if you have an e-mail account and access to an Internet browser. Once you select eDelivery, via the Internet Service Center, all documents available in electronic format will no longer be sent to you in hard copy. You will receive an e-mail notification when the documents become available online. It is your responsibility to provide us with your current e-mail address. You can resume paper mailings at any time without cost, by updating your profile at the Internet Service Center, or contacting us. To learn more about this service, please log on to www.LincolnFinancial.com, select service centers and continue on through the Internet Service Center.
Legal Proceedings
In the ordinary course of its business and otherwise, the Company and its subsidiaries or its separate accounts and Principal Underwriter may become or are involved in various pending or threatened regulatory or legal proceedings, including purported class actions, arising from the conduct of its business. In some instances, the proceedings include claims for unspecified or substantial punitive damages and similar types of relief in addition to amounts for alleged contractual liability or requests for equitable relief.
After consultation with legal counsel and a review of available facts, it is management’s opinion that the proceedings, after consideration of any reserves and rights to indemnification, ultimately will be resolved without any material adverse effect on the consolidated financial position of the Company and its subsidiaries, or the financial position of its separate accounts or Principal Underwriter. However, given the large and indeterminate amounts sought in certain of these proceedings and the inherent difficulty in predicting the outcome of such proceedings, it is reasonably possible that an adverse outcome in certain matters could be material to the Company’s operating results for any particular reporting period.
Please refer to the Statement of Additional Information for possible additional information regarding legal proceedings.
Financial Statements
The December 31, 2025 financial statements of Lincoln New York are included in the Statement of Additional Information (SAI). They should be considered only as they relate to our ability to meet our obligations under the Contract. Instructions on how to obtain the Statement of Additional Information are included on the back cover page.
49
|
Index |
Type of Index |
Term
Duration |
Index Crediting
Methodology |
Protection Method and
Amount of Protection |
Guaranteed Minimum
Declared Crediting
Method Rate |
Guaranteed Minimum
Reset Rate Under
Secure Lock+®
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A-1
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Index |
Type of Index |
Term
Duration |
Index Crediting
Methodology |
Protection Method and
Amount of Protection |
Guaranteed Minimum
Declared Crediting
Method Rate |
Guaranteed Minimum
Reset Rate Under
Secure Lock+® | |||
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A-2
Appendix B — Index Disclosures
B-1
B-2
B-3
The SAI includes additional information about the Contract and Lincoln New York, and is incorporated by reference in this prospectus. The SAI is dated the same date as this prospectus. We will provide the SAI without charge upon request. You may obtain a free copy of the SAI and submit inquiries by:
●
Mailing: Lincoln Life & Annuity Company of New York, PO Box 2348, Fort Wayne, IN 46801-2348
●
Visiting: www.lfg.com/VAprospectus
●
Emailing: CustServSupportTeam@lfg.com
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Calling: 1-877-737-6872
You may also obtain reports and other information about the Company on the SEC’s website at www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers and the Contract’s contract identifier number are listed below.
SEC File No.:
333-283685
EDGAR Contract Identifier:
C000257789
333-283685
EDGAR Contract Identifier:
C000257789
SAI 1
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Dated May 8, 2026
Relating to Prospectus Dated May 8, 2026 for
Relating to Prospectus Dated May 8, 2026 for
Lincoln Level Advantage 2® B-Share
Lincoln Life & Annuity Company of New York
The SAI provides you with additional information about Lincoln New York and your Contract. It is not a prospectus.
A copy of the product prospectus dated May 8, 2026, may be obtained without a charge by writing to the Servicing Office: Lincoln New York Customer Service, Lincoln Life & Annuity Company of New York, PO Box 2348, Fort Wayne, IN 46801-2348, by calling: 1-877-737-6872, or by emailing: CustServSupportTeam@lfg.com and requesting a copy of the Lincoln Level Advantage 2® B-Share product prospectus.
TABLE OF CONTENTS OF THE SAI
|
Contents |
Page |
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B-3 | |
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B-10 | |
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B-10 | |
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B-10 | |
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B-10 |
Special Terms
The special terms used in this SAI are the ones defined in the prospectus.
General Information and History
Lincoln Life & Annuity Company of New York
Lincoln Life & Annuity Company of New York (Lincoln New York or Company) is a stock life insurance company chartered in 1897 and now domiciled in New York. Lincoln New York is a subsidiary of The Lincoln National Life Insurance Company (Lincoln Life). Lincoln Life is an Indiana-domiciled insurance company, engaged primarily in the direct issuance of life insurance contracts and annuities. Lincoln Life is wholly owned by Lincoln National Corporation (LNC), a publicly held insurance and financial services holding company incorporated in Indiana. Lincoln New York is obligated to pay all amounts promised to Contractowners under the contracts.
Our Financial Condition. Any amounts that we may pay under the Contract are subject to our financial strength and claims-paying ability and our long-term ability to make such payments. We issue other types of insurance policies and financial products in addition to the Contract. We also pay our obligations under these products from our assets in the general account. Certain assets backing the Contracts are held in an uninsulated, non-unitized separate account (the SA). The assets of the SA and the general account are subject to the general liabilities of the Company and, therefore, to the Company’s general creditors. In the event of an insolvency or receivership, payments we make from our general account to satisfy claims under the Contract would generally receive the same priority as our other Contractowner obligations.
The general account is subject to regulation and supervision by the New York State Department of Financial Services. The laws and regulations applicable to us regulate the investments we can make with assets held in the SA and our general account. In general, those laws and regulations determine the amount and type of investments which we can make with general account assets.
In addition, state insurance regulations require that insurance companies calculate and establish on their financial statements, a specified amount of reserves in order to meet the contractual obligations to pay the claims of our Contractowners. In order to meet our claims-paying obligations, we regularly monitor our reserves to ensure we hold sufficient amounts to cover actual or expected contract and claims payments. However, it is important to note that there is no guarantee that we will always be able to meet our claims paying obligations, and that there are risks to purchasing any insurance product.
State insurance regulators also require insurance companies to maintain a minimum amount of capital in excess of liabilities, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurer’s operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on assets held in our general account, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in value of these investments resulting from a loss in their market value.
How to Obtain More Information. We encourage both existing and prospective Contractowners to read and understand our financial statements. We prepare our financial statements on both a statutory basis and according to Generally Accepted Accounting Principles (GAAP). Our audited GAAP financial statements, are incorporated by reference into this SAI. See Financial Statements below. You may obtain our audited statutory financial statements and any unaudited statutory financial statements that may be available by visiting our website at www.LincolnFinancial.com.
You also will find on our website information on ratings assigned to us by one or more independent rating organizations. These ratings are opinions of an operating insurance company’s financial capacity to meet the obligations of its insurance and annuity contracts based on its financial strength and/or claims-paying ability.
Non-Principal Risks of Investing In The Contract
Opportunity Cost. Principal amounts committed to an annuity contract are only available to choose from investment options available in the Contract, potentially causing you an opportunity cost.
Dying early. If you die earlier than expected, your designated beneficiary may not receive the full benefit of the future payments.
Divorce. If you get divorced, you could forfeit some or all of the value of your annuity to your former spouse.
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Services
Independent Registered Public Accounting Firm
Ernst & Young LLP, independent registered public accounting firm, One Commerce Square, 2005 Market Street, Suite 700, Philadelphia, Pennsylvania, 19103, has audited the financial statements of Lincoln Life & Annuity Company of New York as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, as set forth in their report, which is included in this SAI and Registration Statement. The aforementioned financial statements are included herein in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.
Purchase of Securities Being Offered
The contracts are offered to the public through licensed insurance agents who specialize in selling our products and who are also associated with broker-dealers; through independent insurance brokers who are also associated with broker-dealers; and through certain securities brokers/dealers selected by us whose personnel are legally authorized to sell annuity products. There are no special purchase plans for any class of prospective buyers. However, under certain limited circumstances described in the prospectus under the section Charges and Other Deductions, any applicable account fee and/or surrender charge may be reduced or waived.
Contract Adjustment – Interim Value Calculation
Interim Value for Indexed Segments with no Annual Locks
The Interim Value of a Segment is equal to the sum of (1) and (2), where:
(1) is the value of the Fixed Income Asset Proxy of a Segment on the Valuation Date the Interim Value is calculated. It is determined for a Segment as: C x [1 / (1 + E)D x (1 + E)D / (1 + F)D]
where:
C = is the Crediting Base of the Segment on the Valuation Date of the calculation.
D = is the total calendar days remaining in the Indexed Term divided by 365.
E = is the Discount Rate that applies to the Segment on the Start Date of the Segment.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
F = is the Discount Rate that applies to the Segment on the Valuation Date.
(2) is the market value of the Derivative Asset Proxy, determined solely by us, on the Valuation Date of the calculation.
Interim Value for Indexed Segments with Annual Locks
The Interim Value of a Segment is equal to the sum of (1) and (2), where:
(1) is the value of the Fixed Income Asset Proxy of a Segment on the Valuation Date the Interim Value is calculated. It is determined for a Segment as: C x [1 / (1 + E)D x (1 + E)D / (1 + F)D]
where:
C = is the initial Crediting Base of the Segment that has been proportionately adjusted for any withdrawals, surrender charges, premium taxes, or rider fees and charges that have occurred during the Indexed Term prior to the Valuation Date of the calculation.
D = is the total calendar days remaining in the Indexed Term divided by 365.
E = is the Discount Rate that applies to the Segment on the Start Date of the Segment.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
F = is the Discount Rate that applies to the Segment on the Valuation Date.
(2) is the market value of the Derivative Asset Proxy, determined solely by us, on the Valuation Date of the calculation.
Each component of the calculation is further explained as follows:
1.
Fixed Income Asset Proxy. The Fixed Income Asset Proxy is a hypothetical fixed income asset that is meant to represent the
B-3
market value of the investment instruments supporting the Segment.
The Discount Rate is derived from the Reference Rate, which is the sum of a U.S. Constant Maturity Treasury (CMT) yield plus a
market observable spread of investment grade U.S. corporate bonds.
If the U.S. Constant Maturity Treasury yield(s) are not published for a particular day or we are delayed in receiving these values, then we will use the yield(s) on the last day they were published. If the U.S. Constant Maturity Treasury yield(s) are no longer published, are not published for an extended period, or are discontinued, then we may substitute another suitable method for
determining these components of the Reference Rate.
If the U.S. Constant Maturity Treasury yield(s) are not published for a time to maturity that matches the selected duration, then
the yield(s) will be interpolated between the yield(s) for maturities that are published.
If the market observable spread(s) of investment grade U.S. Corporate Bonds are not published for a particular day, or we are delayed in receiving these values then we will use the spread(s) on the last day they were published. If these components are no longer published, are not published for an extended period, or are discontinued, then we may substitute another suitable method
for determining these components of the Reference Rate.
We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion.
2.
Derivative Asset Proxy. We utilize a fair market methodology to value the replicating portfolio of financial instruments that sup
port the product.
The Derivative Asset Proxy is determined assuming a package of derivative assets and other financial instruments, determined solely by Us, that replicates the Performance Rate on the End Date of the Segment. The value of the package of derivative assets and other financial instruments is determined on any Valuation Date that the Interim Value is calculated for a Segment. The valuation of the financial instruments is based on standard methods for valuing financial instruments and based on inputs from third party vendors. The methodology used to value these financial instruments is determined solely by us and may vary, higher or lower, from other estimated valuations or the actual selling price of identical financial instruments. Any variance between our estimated fair value price and other estimated or actual prices may be different from Segment type to Segment type and may
also change from day to day.
The options or other instruments for each Indexed Account type are as follows:
A. At-the money call option: This represents the market value of the potential to receive an amount equal to the percentage growth in the Index during the Indexed Term.
B. Out-of-the-money call option: This represents the market value of the potential for gain in excess of the Performance Cap rate.
C. Out-of-the-money put option: This represents the market value of the potential to receive an amount equal to the excess loss beyond the Protection Level.
D. Digital option: This represents the market value of the option to provide the Performance Trigger Rate under zero or positive Index returns.
E. At-the money put option: This represents the market value of the potential to receive an amount equal to the percentage loss of the index during the Indexed Term.
F. Dual structure: This represents the market value of receiving a maturity amount equal to the Dual Performance Trigger Rate or Dual Rate at the end of the Indexed Term independent of the underlying index returns.
NOTE: Put option C will always reduce the Interim Value even if the Index has increased during the Indexed Term.
For each Segment with no Annual Lock with Performance Cap rates and Protection Levels, the replicating portfolio of options is equal to: A minus B minus C.
For each Segment with Performance Trigger Rates and Protection Levels, the replicating portfolio of options is equal to: D minus C.
For each Segment with a Dual Performance Trigger Rate and Protection Level, the replicating portfolio of financial instruments is equal to: F minus C.
For each Segment with Annual Lock, we designate and value a replicating (derivative) structure which is tied to the compounded performance for each year of the Annual Lock Segment. The market standard model is adjusted by us to account for additional market risks relevant to the Annual Lock Segment.
For each Dual Plus Segment, the replicating portfolio of financial instruments is equal to: F plus B (at the Dual Rate) minus B (at the Performance Cap Rate) minus E.
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The key inputs, including but not limited to the following, are also incorporated into the models:
(1) Implied Volatility of the Index—This input varies with (i) how much time remains until the Segment End Date, which is determined by using an expiration date for the designated option that corresponds to that time remaining and (ii) the relationship between the strike price of that option and the level of the index at the time of the calculation (including the potential for resets of each Annual Lock Period).
This relationship is referred to as the “moneyness” of the option described above, and is calculated as the ratio of current price to the strike price. Direct market data for these inputs for any given early withdrawal is generally not available. This is because options on the Index that actually trade in the market have specific maturity dates and moneyness values that are unlikely to precisely match the Segment End Date (or remaining Annual Lock Periods) and moneyness of the designated option that we use in our calculations. Accordingly, we interpolate between the implied volatility quotes that are based on the actual maturities and moneyness values.
(2) Interest Rate—We use key derivative interest rates obtained from information provided by independent third-parties which are recognized financial reporting vendors. Interest rates are obtained for maturities adjacent to the actual time remaining in the Segment at the time of the early withdrawal. We use linear interpolation to derive the exact remaining duration rate needed as the input.
(3) Index Dividend Yield—On a daily basis, we use the projected annual dividend yield across the entire index obtained from information provided by independent third-party financial institutions. This value is a widely used assumption and is readily available from recognized financial reporting vendors.
In addition, when we calculate the Interim Value, we calculate market values of financial instruments each business day based on inputs from outside vendors. Inputs obtained from these outside vendors may vary over time based on market conditions and changes in valuation standards. If we are delayed in receiving these values, we will use the option value on the last day it was available to calculate a new Interim Value.
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Examples
The following examples demonstrate how the Interim Value is calculated in different scenarios for Indexed Segments with Performance Caps and Protection Levels.
|
|
1 Year |
6 Year |
6 Year |
|
Indexed Term length |
12
months |
72
months |
72
months |
|
Months since Indexed Term Start Date |
9 |
69 |
15 |
|
Indexed Crediting Base |
$1,000 |
$1,000 |
$1,000 |
|
Protection Level |
10% |
10% |
10% |
|
Performance Cap |
12% |
100% |
100% |
|
Months to End Date |
3 |
3 |
57 |
|
Change in Index Value is -30% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$(197) |
$(197) |
$(163) |
|
Interim Value = Sum of 1 + 2 |
$800 |
$800 |
$777 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$800 |
$800 |
$800 |
|
Change in Index Value is -10% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$(28) |
$(27) |
$(6) |
|
Interim Value = Sum of 1 + 2 |
$969 |
$970 |
$934 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$1,000 |
$1,000 |
$1,000 |
|
Change in Index Value is 20% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$104 |
$203 |
$210 |
|
Interim Value = Sum of 1 + 2 |
$1,101 |
$1,200 |
$1,150 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$1,120 |
$1,200 |
$1,200 |
|
Change in Index Value is 40% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$119 |
$401 |
$335 |
|
Interim Value = Sum of 1 + 2 |
$1,116 |
$1,398 |
$1,275 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$1,120 |
$1,400 |
$1,400 |
B-6
The following examples demonstrate how the Interim Value is calculated in different scenarios for Indexed Segments with Performance Trigger Rates and Protection Levels.
|
|
|
1 Year |
1 Year |
|
Indexed Term length |
|
12
months |
12
months |
|
Months since Indexed Term Start Date |
|
7 |
4 |
|
Indexed Crediting Base |
|
$1,000 |
$1,000 |
|
Protection Level |
|
15% |
15% |
|
Performance Trigger Rate |
|
12.5% |
12.5% |
|
Months to End Date |
|
5 |
8 |
|
Change in Index Value is -15% |
|
1 Year |
1 Year |
|
1. Fair value of the fixed income asset proxy |
|
$983 |
$973 |
|
2. Fair value of derivative asset proxy |
|
$(30) |
$(33) |
|
Interim Value = Sum of 1 + 2 |
|
$953 |
$940 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,000 |
$1,000 |
|
Change in Index Value is -5% |
|
1 Year |
1 Year |
|
1. Fair value of the fixed income asset proxy |
|
$983 |
$973 |
|
2. Fair value of derivative asset proxy |
|
$30 |
$24 |
|
Interim Value = Sum of 1 + 2 |
|
$1,013 |
$997 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,000 |
$1,000 |
|
Change in Index Value is 10% |
|
1 Year |
1 Year |
|
1. Fair value of the fixed income asset proxy |
|
$983 |
$973 |
|
2. Fair value of derivative asset proxy |
|
$93 |
$83 |
|
Interim Value = Sum of 1 + 2 |
|
$1,076 |
$1,056 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,125 |
$1,125 |
|
Change in Index Value is 20% |
|
1 Year |
1 Year |
|
1. Fair value of the fixed income asset proxy |
|
$983 |
$973 |
|
2. Fair value of derivative asset proxy |
|
$113 |
$105 |
|
Interim Value = Sum of 1 + 2 |
|
$1,096 |
$1,078 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,125 |
$1,125 |
B-7
The following examples demonstrate how the Interim Value is calculated in different scenarios for Indexed Segments with Dual Performance Trigger Rates and Protection Level.
|
|
|
1 Year |
1 Year |
|
Indexed Term length |
|
12
Months |
12
Months |
|
Months since Indexed Term Start Date |
|
9 |
3 |
|
Indexed Crediting Base |
|
$1,000 |
$1,000 |
|
Protection Level |
|
10% |
10% |
|
Dual Performance Trigger Rate |
|
6% |
6% |
|
Months to End Date |
|
3 |
9 |
|
Change in Index Value is -15% |
|
1 Year |
1 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$993 |
$980 |
|
2. Fair Value of derivative asset proxy |
|
$(4) |
$(24) |
|
Interim Value = Sum of 1 + 2 |
|
$989 |
$956 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,010 |
$1,010 |
|
Change in Index Value is -5% |
|
1 Year |
1 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$993 |
$980 |
|
2. Fair Value of derivative asset proxy |
|
$43 |
$20 |
|
Interim Value = Sum of 1 + 2 |
|
$1,036 |
$1,000 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,060 |
$1,060 |
|
Change in Index Value is 10% |
|
1 Year |
1 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$993 |
$980 |
|
2. Fair Value of derivative asset proxy |
|
$59 |
$49 |
|
Interim Value = Sum of 1 + 2 |
|
$1,052 |
$1,029 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,060 |
$1,060 |
|
Change in Index Value is 20% |
|
1 Year |
1 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$993 |
$980 |
|
2. Fair Value of derivative asset proxy |
|
$59 |
$55 |
|
Interim Value = Sum of 1 + 2 |
|
$1,052 |
$1,035 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,060 |
$1,060 |
B-8
The following examples demonstrate how the Interim Value is calculated in different scenarios for Dual Plus Indexed Segments.
|
|
|
6 Year |
6 Year |
|
Indexed Term length |
|
72
Months |
72
Months |
|
Months since Indexed Term Start Date |
|
54 |
18 |
|
Indexed Crediting Base |
|
$1,000 |
$1,000 |
|
Dual Rate |
|
15% |
15% |
|
Performance Cap |
|
70% |
70% |
|
Months to End Date |
|
18 |
54 |
|
Change in Index Value is -15% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$(10) |
$(12) |
|
Interim Value = Sum of 1 + 2 |
|
$967 |
$922 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,000 |
$1,000 |
|
Change in Index Value is -5% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$67 |
$57 |
|
Interim Value = Sum of 1 + 2 |
|
$1,044 |
$991 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,100 |
$1,100 |
|
Change in Index Value is 10% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$175 |
$149 |
|
Interim Value = Sum of 1 + 2 |
|
$1,152 |
$1,083 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,150 |
$1,150 |
|
Change in Index Value is 20% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$245 |
$205 |
|
Interim Value = Sum of 1 + 2 |
|
$1,222 |
$1,139 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,200 |
$1,200 |
B-9
|
The following example demonstrates the effect of taking a withdrawal when the Interim Value is down from the initial Purchase Payment and there are
Surrender Charges applicable. | ||
|
Initial Purchase Payment: |
$50,000 |
This equals the total Crediting Base for all
Indexed Accounts selected. |
|
Current Contract Value: |
$45,000 |
This is the sum of the Interim Value of all
Indexed Segments. |
|
Withdrawal requested: |
$9,000 |
This is 20% of the current Contract Value
(and exceeds the amount that is free of
surrender charges). |
|
Surrender charge: |
$315 |
Based on a surrender charge rate of 7%
and applied to the portion of the
withdrawal that exceeds 10% of Contract
Value. |
|
Interim Value after withdrawal: |
$35,685 |
This is the total reduction of 20.70% from
current Contract Value. |
|
Crediting Base after withdrawal: |
$39,650 |
The Crediting Base is reduced
proportionately by 20.70%. |
Principal Underwriter
Lincoln Financial Distributors, Inc., (“LFD”) is a wholly owned subsidiary of Lincoln National Corporation and an affiliate of Lincoln New York as a result of common control. LFD serves as the principal underwriter (the “Principal Underwriter”) for the Contracts, as described in the prospectus. The offering of the Contracts is continuous. The Principal Underwriter has also entered into selling agreements with other broker-dealers (“Selling Firms”) for the sale of the contracts. Sales representatives who are registered with Selling Firms are appointed as our insurance agents. LFD, in its capacity as Principal Underwriter, has paid no sales compensation to date in connection with the Contracts. The Principal Underwriter retained no underwriting commissions for the sale of the contracts. LFD maintains its principal place of business at 130 North Radnor Chester Road, Radnor, Pennsylvania 19087.
Contract Information
Additional Services
Automatic Withdrawal Service (AWS)—AWS provides an automatic, periodic withdrawal of Contract Value to you. AWS may take place on either a monthly, quarterly, semi-annual or annual basis, as selected by the Contractowner. You may elect to participate in AWS at the time of application or at any time before the Annuity Commencement Date by sending a written request or in another manner acceptable to us. The minimum Contract Value required to establish AWS is $10,000. You may cancel or make changes to your AWS program at any time by sending a written request to us. If telephone authorization has been elected, certain changes may be made by telephone. Notwithstanding the requirements of the program, any withdrawal must be permitted under Section 401(a)(9) of the IRC for qualified plans or permitted under Section 72 of the IRC for nonqualified contracts. To the extent that withdrawals under AWS do not qualify for an exemption from the contingent deferred sales charge, we will assess any applicable surrender charges on those withdrawals. See Surrender Charge.
Financial Statements
The December 31, 2025 financial statements of Lincoln New York are incorporated into this SAI by reference to the most recent Form N-VPFS (“N-VPFS”) filed with the SEC.
B-10
Prospectus 2
Lincoln Level Advantage 2® Advisory Index-Linked Annuity Contracts
May 8, 2026
Home Office:
Lincoln Life & Annuity Company of New York
120 Madison Street, Suite 1310
Syracuse, NY 13202
www.LincolnFinancial.com
Lincoln Life & Annuity Company of New York
120 Madison Street, Suite 1310
Syracuse, NY 13202
www.LincolnFinancial.com
Servicing Office:
Lincoln Life & Annuity Company of New York
PO Box 2348
Fort Wayne, IN 46801-2348
1-877-737-6872
Lincoln Life & Annuity Company of New York
PO Box 2348
Fort Wayne, IN 46801-2348
1-877-737-6872
This prospectus describes an individual single premium index-linked deferred annuity contract issued by Lincoln Life & Annuity Company of New York (Lincoln New York or Company).
This Contract can be purchased as either a nonqualified annuity or qualified retirement annuity under Section 408 (IRAs) or 408A (Roth IRAs) of the tax code. Generally, you do not pay federal income tax on the Contract's growth until it is paid out. You receive tax deferral for an IRA whether or not the funds are invested in an annuity contract. Further, if your Contract is a Roth IRA, you generally will not pay income tax on a distribution, provided certain conditions are met. Therefore, there should be reasons other than tax deferral for purchasing a qualified annuity contract. We offer other types of annuity contracts that may offer different investment options, features, and optional benefits. You should carefully consider whether or not this Contract is the best product for you.
This Contract is available through third-party financial intermediaries who may charge an advisory fee for their services. That fee is in addition to contract fees and expenses. If you elect to pay third-party advisory fees out of your Contract Value, each deduction may impact your Contract Value, reduce the Death Benefit and other guaranteed benefits, and may be subject to a negative Contract Adjustment, federal and state income taxes, and a 10% penalty tax.
This Contract is a complex investment and involves risks, including potential loss of principal.
The Contract is designed to accumulate Contract Value and to provide retirement income over a certain period of time or for life subject to certain conditions. The Contract offers several Indexed Accounts which provide a rate of return based in part on the performance of an Index you select. This Contract also offers a Death Benefit payable upon the death of the Contractowner or Annuitant. This prospectus is used by both new purchasers and current Contractowners and describes all material rights and obligations of annuity purchasers under the Contract. The Contract described in this prospectus is only available in New York.
If you are a new investor in the Contract, you may cancel your Contract within ten days of receiving it without paying fees or penalties although any Contract Adjustments will be applied. This free-look or cancellation period may be longer if you are replacing an existing contract. Upon cancellation, you will receive the greater of a full refund of the amount you paid with your application or your total Contract Value, less any withdrawals. You should review this prospectus and consult with your financial professional for additional information about the specific cancellation terms that may apply.
The minimum Purchase Payment for the Contract is $25,000. No Purchase Payments will be accepted after the date the Contract is issued. Accordingly, you will be unable to increase your Contract Value or Death Benefit by making subsequent Purchase Payments. The minimum allocation to an Indexed Account is $2,000 and you can only reallocate Contract Value to an Indexed Account on an Indexed Anniversary Date.
You may invest in one or more of the available Indexed Accounts, subject to any limitations described herein. See Appendix A – Investment Options Available Under The Contract. Indexed Accounts are established for either 1-Year or 6-Year Terms, and the return on these accounts at the end of the Indexed Term is based in part on the performance of a specified Index. Each Indexed Account will have either (i) a specified Performance Cap, which is the highest Performance Rate that we will credit; (ii) a Performance Trigger Rate that provides a specified rate of return if the performance of the Index is zero or positive; (iii) a Dual Performance Trigger Rate, which will either provide a specific rate of return if the performance of the Index is positive, zero or negative within the Protection Level or be added to the Index performance percentage and the Protection Level if the Index performance is negative and beyond the Protection Level; or (iv) a Dual Rate, which will provide either a minimum rate of return if the Index performance is between zero and the Dual Rate, or will be added to the Index performance if the Index performance is negative, and a Performance Cap that applies if the Index performance exceeds the Dual Rate. We will not offer a 1-Year Indexed Account with a Performance Cap or Performance Trigger Rate below 4.00% or a 6-Year Annual Lock Indexed Account with a Performance Cap below 5.00%. We will not offer a 1-Year Indexed Account with a Dual Performance Trigger Rate below 5.00%. We will not offer a 6-Year Performance Cap Indexed Account with a Performance Cap below 21.00%. We will not offer a 6-Year Dual Plus Indexed Account with a Performance Cap below 27.00%. If you choose to lock the Interim Value of an Indexed Segment under Secure Lock+®, we will reset the Performance Cap for that Indexed Segment, and that Reset Rate may be lower than these stated minimums. We will not offer a Reset Rate under Secure Lock+® less than 3.50%. The amount of gain credited for each Indexed Segment at the end of an Indexed
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Term will be limited by the Performance Cap, Performance Trigger Rate or Dual Performance Trigger Rate we declare. We guarantee a minimum declared crediting rate for each Indexed Account. See Appendix A – Investment Options Available Under The Contract for the guaranteed minimum declared crediting rates for each Indexed Account.
The amount of loss from negative Index performance for each Indexed Segment at the end of an Indexed Term is limited by the Protection Level or the Dual Rate for that Segment. Your Contract Value will not be impacted by any loss up to the applicable Protection Level or Dual Rate that you choose if you do not make withdrawals during the Indexed Term. Under extreme circumstances, you could lose up to 90% of your investment in an Indexed Account with a 10% Protection Level or a 10% Dual Rate, up to 85% of your investment in an Indexed Account with a 15% Protection Level or a 15% Dual Rate, up to 80% of your investment in an Indexed Account with a 20% Protection Level, and up to 75% of your investment in an Indexed Account with a 25% Protection Level. This potential of loss exists for each Indexed Term, and over the life of the Contract which could be much greater. We do not guarantee that the Contract will always offer Indexed Accounts that limit Index losses, in which case you could lose the entire amount of your investment.
This Contract is not designed for short-term investing and is not appropriate for the investor who needs ready access to cash. Withdrawals could result in negative Contract Adjustments, taxes, and tax penalties. Your risk of loss may be greater if you make a withdrawal prior to the End Date of an Indexed Term because a negative Contract Adjustment based on the Interim Value of the Indexed Segment may apply. The Interim Value for each Indexed Segment is calculated each Valuation Date prior to the End Date of the Indexed Term. The Interim Value calculation is not based on the value of the Index but the fair market value of the portfolio of investment instruments supporting the Indexed Segment. Under extreme conditions a negative Contract Adjustment based on Interim Value could result in a loss of up to 100% of your Contract Value. Such loss can occur even if an Index has increased in value. This means your Interim Value could reflect negative performance, even if the Index Value has increased.
If you withdraw Contract Value prior to the End Date of an Indexed Term (including the ongoing deduction of advisory fees), the withdrawal will cause an immediate reduction in your Indexed Crediting Base for each of your Segments in a proportion equal to the reduction in the Interim Value of each Segment. A proportional reduction could be larger than the dollar amount of your withdrawal. Reductions in your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Segment Ending Value at the end of the Indexed Term. Once your Indexed Crediting Base is reduced due to a withdrawal during any Indexed Term, you cannot increase it during the remainder of the Indexed Term unless Secure Lock+® is exercised.
We hold all or a portion of the assets for our obligations for the Indexed Account options in a non-registered, non-insulated separate account, established by Us. We do not guarantee how any of the Indexed Accounts will perform. There is a risk of loss of your investment because you agree to absorb all losses in excess of the level of protection you selected.
Investors should consult a financial professional about the Contract’s features, benefits, risks, and fees, and whether the Contract is appropriate for the investor based upon your financial situation and objectives. We do not guarantee that all of the Indexed Account options will always be available. Our obligations under the Contract, including amounts to be paid to you from the Indexed Accounts, are subject to our financial strength and claims paying ability.
Neither the U.S. Government nor any federal agency insures or guarantees your investment in the Contract. The Contracts are not bank deposits and are not endorsed by any bank or government agency.
Additional information about certain investment products, including registered index-linked annuities, has been prepared by the SEC’s staff and is available online at www.Investor.gov.
The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Special Terms
In this prospectus, the following terms have the indicated meanings:
Annual Locks—An Indexed Account with Annual Locks is a multi-year account in which the performance is calculated on each Indexed Anniversary Date, but the performance is not credited to or deducted from the Indexed Segment until the End Date.
Annuitant—The person upon whose life the annuity benefit payments are based, and upon whose death a Death Benefit may be paid.
Annuity Commencement Date—The Valuation Date when payment of retirement income benefits begins under the Annuity Payout option you select.
Annuity Payout—A regularly scheduled payment (under any of the available annuity options) that occurs after the Annuity Commencement Date.
Beneficiary—The person you choose to receive any Death Benefit paid if you die before the Annuity Commencement Date.
Contract—The index-linked annuity contract you have entered into with Lincoln New York.
Contract Adjustment—A positive or negative adjustment to the Contract based on the Interim Value of an Indexed Segment.
Contractowner (you, your, owner)—The person who can exercise the rights within the Contract (decides on investment allocations, reallocations, payout option, designates the Beneficiary, etc.). Usually, but not always, the Contractowner is the Annuitant.
Contract Value (may be referred to as Account Value in marketing materials)—The sum of the current values of the Indexed Accounts (i.e. Interim Values if between the Start Date and the End Date of an Indexed Term).
Contract Year—Each 12-month period starting with the effective date of the Contract and starting with each contract anniversary after that.
Crediting Method—The method used in determining the Performance Rate for an Indexed Segment. There are several Crediting Methods including Performance Cap, Performance Trigger Rate, Dual Performance Trigger Rate, and Dual Plus.
Death Benefit—Before the Annuity Commencement Date, the amount payable to your designated Beneficiary if the Contractowner dies. As an alternative, the Contractowner may receive a Death Benefit upon the death of the Annuitant prior to the Annuity Commencement Date.
Dual Performance Trigger Rate—The rate used, in part, to determine the Performance Rate for an Indexed Segment at the end of the Indexed Term.
Dual Rate—The rate used, in part, to determine the Performance Rate for an Indexed Segment of a Dual Plus Indexed Account at the end of the Indexed Term.
Dual Plus—A Crediting Method that uses, in part, a Performance Cap and Dual Rate to determine the Performance Rate for an Indexed Segment at the end of the Indexed Term.
End Date—The last day of the Indexed Term.
Fee-Based Financial Plan—A wrap account, managed account or other investment program whereby an investment firm/professional offers asset allocation and/or investment advice for a fee. Such programs can be offered by broker-dealers, banks and registered investment advisers, trust companies and other firms. Under this arrangement, the Contractowner pays the investment firm/professional directly for services. Deductions made for advisory fees may impact your Contract Value, and may reduce the benefits under your Contract.
Good Order—The actual receipt at our Servicing Office of the requested transaction in writing or by other means we accept, along with all information and supporting legal documentation necessary to complete the transaction. The forms we provide will identify the necessary documentation. We may, in our sole discretion, determine whether any particular transaction request is in Good Order, and we reserve the right to change or waive any Good Order requirements at any time.
Index—The market index of which the performance is used to base the return of an Indexed Account.
Index Value—The published closing value of an Index on a Valuation Date. If an Index Value is not published for a particular day, we will use the closing Index Value on the next Valuation Date it is published.
Indexed Account—An investment option that provides a return based, in part, on the performance of an Index.
Indexed Anniversary Date—The same calendar day, each calendar year, as the day you first invested in an Indexed Segment.
Indexed Crediting Base or Crediting Base—An amount used in the calculation of the performance return and the Interim Value for an Indexed Segment.
Indexed Segment or Segment—The specific Indexed Account option(s) selected by a Contractowner for allocations of the Purchase Payment or reallocation of Contract Value.
Indexed Term or Term—The period of time during which Contract Value is invested in a particular Indexed Segment.
Interim Value—Your Contract Value for an Indexed Segment during an Indexed Term. The Interim Value is a calculated value and is used in the event that a withdrawal, Death Benefit payment, reallocation, annuitization, or surrender occurs at any time other than the Start Date or End Date of an Indexed Term. The Interim Value is also used when Secure Lock+® is chosen.
Lincoln New York (we, us, our, Company)—Lincoln Life & Annuity Company of New York.
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Performance Cap or Cap—The highest Performance Rate that can be credited to an Indexed Segment at the end of an Indexed Term for any positive Index performance.
Performance Rate—A rate of return for an Indexed Segment based on the performance of an Index over a specified period of time, adjusted for the applicable Protection Method and subject to the Crediting Method, depending on the Indexed Account you choose.
Performance Trigger Rate— The rate used to determine the Performance Rate for an Indexed Segment at the end of the Indexed Term if the Index performance is zero or positive.
Protection Level—The portion of loss that the Company will absorb from any negative Index performance. If the Index performance is negative by more than the Protection Level, there is a risk of loss of principal and any previously credited amount to the Contractowner. The Protection Level is not available on Dual Plus accounts.
Protection Method—The method used in protecting from negative Index performance at the end of an Indexed Term, including Protection Levels and Dual Rates.
Purchase Payment—The initial investment made by a single premium payment to purchase this Contract.
Reset Date—The most recent Valuation Date that an Indexed Segment was reset.
Reset Rate—The new Performance Cap if you choose to lock the Interim Value of an Indexed Segment before the end of the Indexed Term under Secure Lock+®.
Secure Lock+®—A feature that allows the Interim Value to be locked in on any given Valuation Date, other than an Indexed Anniversary, for an Indexed Segment.
Segment Ending Value—The value of an Indexed Segment on the End Date after adjustment for the Performance Rate.
Start Date—The Valuation Date on which the Indexed Segment begins.
Valuation Date—Each day the New York Stock Exchange (NYSE) is open for trading.
Valuation Period—The period starting at the close of trading (normally 4:00 p.m., Eastern Time) on each day that the NYSE is open for trading (Valuation Date) and ending at the close of such trading on the next Valuation Date.
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Overview of the Contract
Purpose of the Contract
The Lincoln Level Advantage 2® Advisory Index-Linked Annuity contract is designed to accumulate Contract Value and to provide income over a certain period of time or for life, subject to certain conditions. The Contract can supplement your retirement income by providing a stream of income payments during the payout phase. The Contract offers several Indexed Accounts which provide a rate of return based in part on the performance of an Index you select and a Death Benefit payable to your designated Beneficiaries upon the death of a Contractowner or Annuitant.
This Contract is issued as part of a Fee-Based Financial Plan which is described in more detail in the Benefits Available Under The Contract – Additional Services section below.
This Contract may be appropriate if you have a long-term investment horizon. It is not intended for people who may need to make early or frequent withdrawals. See Surrenders and Withdrawals.
Phases of the Contract
Your Contract has two phases: (1) an accumulation (savings) phase, prior to the Annuity Commencement Date; and (2) a payout (income) phase, after the Annuity Commencement Date.
Accumulation (Savings) Phase. To help you accumulate assets during the accumulation phase, you can invest your Purchase Payment and earnings in the Indexed Accounts available under the Contract, each of which has its own Index, Indexed Term, Crediting Method, and Protection Method. The available Indexed Accounts are listed in Appendix A – Investment Options Available Under The Contract.
Different Crediting Methods and Protection Methods are available for your Indexed Accounts. We will credit positive, negative, or zero interest at the end of an Indexed Term to amounts allocated to an Indexed Account based, in part, on the performance of the Index. Interest is credited for any gain or deducted for any loss only on the End Date of an Indexed Segment. You could lose a significant portion of your investment if the Index declines in value.
The Protection Method you select determines the type of protection you will have for each Indexed Segment. For Indexed Accounts with Protection Level, the Protection Level is the portion of any negative Index performance that will not impact your Contract Value if you do not make any withdrawals until the End Date of the Indexed Segment. Your Contract Value will not be impacted up to the amount of the Protection Level you elect, and, after that, the Indexed Segment will be impacted for the remaining portion of the loss. For example, if the Index return is -15% and you have a 10% Protection Level, your Contract Value will not be impacted by the first 10% of negative Index performance and we will deduct 5% at the end of the Indexed Term. Any loss will reduce the amount of your investment in the Indexed Segments. The Contract offers Indexed Accounts with Protection Levels that protect you against losses of 10% to 25%.
For Indexed Accounts with a Dual Rate, if the Index performance is negative, your Performance Rate equals the Index performance plus the Dual Rate, which may result in either a negative or positive return. For example, if the Index return is -10% and you have a Dual Rate of 15%, we will credit 5% in interest at the end of the Indexed Term. If the Index return is -20% and you have a Dual Rate of 15%, we will deduct 5% in interest at the end of the Indexed Term. Any loss will reduce the amount of your investment in the Indexed Segments. The Contract offers Indexed Accounts with Dual Rates of 10% or 15%.
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Annuity (Income) Phase. You can elect to annuitize your Contract and turn your Contract Value into a stream of income payments (sometimes called Annuity Payouts), at which time the accumulation phase of the Contract ends. These payments may continue for a set period of years, for as long as you live, or for the longer of the two.
If you annuitize, your investments will be converted to income payments and you will no longer be able to choose to make withdrawals from your Contract. All benefits during the accumulation phase (including guaranteed minimum Death Benefits) terminate upon annuitization.
Primary Features and Options of the Contract
Accessing your money. During the accumulation phase, you can surrender the Contract or withdraw part of the Contract Value. If you surrender or take an early withdrawal, including the deduction of advisory fees, you may have to pay taxes and a tax penalty if you are younger than 59½. No interest will be credited to funds withdrawn or surrendered before the end of an Indexed Term. Additionally, if you surrender the Contract or withdraw from an Indexed Segment prior to its End Date, you will be subject to a Contract Adjustment based on the Interim Value.
Secure Lock+®. On any Valuation Date, excluding an Indexed Anniversary, one time each Contract Year between the Term Start Date and Term End Date, you may request to lock the Interim Value (“Secure Lock+®”) of an Indexed Segment.
You could lose a significant amount of money due to the Contract Adjustments based on Interim Values if amounts, are removed from an Indexed Segment prior to the Segment End Date. The Interim Value calculated at the end of the Valuation Date will be locked in and once selected, a Secure Lock+® is irrevocable. If you request a lock-in of the Indexed Segment when the Interim Value is below your Indexed Crediting Base, Protection Methods do not apply and you assume all loss. Secure Lock+® is not available with all Crediting Methods and Protection Methods or upon the selection of an Annuity Payout option. Withdrawals prior to the Segment End Date may have a significant impact on your Contract Value. See the Contract Adjustments discussion below.
Tax treatment. Earnings (if any) on your investments are generally tax-deferred. You are taxed only when: (1) you take a withdrawal or surrender; (2) you receive an income payment from the Contract; or (3) upon payment of a Death Benefit.
Death Benefit. Your Contract includes a Death Benefit that will be paid upon the death of either the Contractowner(s) or the Annuitant.
Additional Service. The Automatic Withdrawal Service allows you to automatically take periodic withdrawals from your Contract, and is available under the Contract for no additional charge.
Fees Associated with Fee-Based Financial Plans. You may provide authorization to have your advisory fees paid to your financial professional’s investment firm from your Contract Value. Advisory fee withdrawals may not be treated as a distribution for federal tax purposes under certain conditions. Certain firms may not allow withdrawals to pay advisory fees from your Contract Value. These
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payments will be treated as withdrawals from your Contract Value and may result in a significant reduction in your Death Benefit. An Advisory fee withdrawal from the Contract will always reduce the Contract Value and Contract Value portion of the elected Death Benefit on a dollar-for-dollar basis. Over time, withdrawals taken for the payment of advisory fees could significantly reduce your Contract Value. Please discuss the impact of deducting advisory fees from your Contract Value prior to making any elections with your financial professional prior to making any election.
Additionally, if you elect to pay a third-party advisory fee out of your Contract Value, this deduction may result in a negative Contract Adjustment, reduce your Death Benefit, and may be subject to federal and state income taxes and a 10% federal penalty tax. See Federal Tax Matters – Payment of Investment Advisory Fees.
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Important Information You Should Consider About the Lincoln Level Advantage 2® Advisory Index-linked Annuity Contract
|
|
FEES, EXPENSES, AND ADJUSTMENTS |
Location in
Prospectus |
|
Are There Charges or
Adjustments for Early
Withdrawals? |
|
●Fee Tables ●Charges and
Adjustments ●Charges and
Adjustments –
Contract
Adjustments |
|
Are There Transaction
Charges? |
|
●Fee Tables ●Charges and
Adjustments ●Federal Tax Matters
— Payment of
Investment Advisory
Fees |
|
Are There Ongoing Fees and
Expenses? |
|
●Fee Tables ●Charges and
Adjustments |
|
|
RISKS |
Location in
Prospectus |
|
Is There a Risk of Loss
From Poor Performance? |
|
●Principal Risks of
Investing in the
Contract |
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|
|
RISKS |
Location in
Prospectus |
|
Is This a Short-Term
Investment? |
|
●Principal Risks of
Investing in the
Contract ●Surrenders and
Withdrawals ●Fee Tables ●Charges and
Adjustments |
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|
|
RISKS |
Location in
Prospectus |
|
What are the Risks
Associated
With the Investment
Options? |
|
●Principal Risks of
Investing in the
Contract |
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|
|
RISKS |
Location in
Prospectus |
|
What are the Risks Related
to the Insurance Company? |
|
●Principal Risks of
Investing in the
Contract |
|
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RESTRICTIONS |
Location in
Prospectus |
|
Are There Restrictions
on the Investment Options? |
|
●Indexed Accounts ●Appendix A –
Investment Options
Available Under The
Contract |
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|
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RESTRICTIONS |
Location in
Prospectus |
|
Are There any Restrictions
on Contract Benefits? |
|
●The Contracts |
|
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TAXES |
Location in
Prospectus |
|
What are the Contract’s
Tax Implications? |
|
●Federal Tax Matters |
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CONFLICTS OF INTEREST |
Location in
Prospectus |
|
How are Investment
Professionals Compensated? |
|
●Distribution of the
Contracts |
|
Should I Exchange My
Contract? |
●
|
●The Contracts -
Replacement of
Existing Insurance |
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|
There are no sales charges, deferred sales charges, or surrender charges associated with this Contract. |
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|
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Contract Adjustment (Interim Value) Maximum Potential Loss (as a percentage of Contract Value at the start of an
Indexed Term) |
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Indexed Term. The Indexed Term is the specified period of time over which an Index’s performance is measured, subject to applicable limits on Index gains and losses, to determine the amount of positive, negative or zero interest that will be credited to an Indexed Account at the end of the period. 1-Year and 6-Year Indexed Terms are available in this Contract. An Indexed Segment begins on the day your money is allocated to an Indexed Segment, called the Start Date. The yearly anniversary of the Start Date of the initial Indexed Segment is the Indexed Anniversary Date of your Contract. This is the Indexed Anniversary Date for the life of your Contract.
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Indexed Account = 6-Year with Annual Locks with a 10% annual Performance Cap and 10% Protection Level
Allocation to Indexed Segment = $100,000
Indexed Crediting Base at Beginning of Term = $100,000
|
Indexed
Segment
Anniversary |
Index %
Change |
Indexed Segment
Performance
Rate (adjusted for
Cap or Protection
Level) |
Indexed Segment
Performance
Amount |
Adjusted Indexed
Crediting Base/
Anniversary
Value |
|
1/8/2027 |
+7% |
+7% |
$7,000 |
$107,000 |
|
1/8/2028 |
+12% |
+10% |
$10,700 |
$117,700 |
|
1/8/2029 |
-13% |
-3% |
-$3,531 |
$114,169 |
|
1/8/2030 |
-5% |
0% |
$0 |
$114,169 |
|
1/8/2031 |
+5% |
+5% |
$5,708 |
$119,877 |
|
1/8/2032 |
+17% |
+10% |
$11,988 |
$131,865 |
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Indexed Account = 1-Year Indexed Account with a 10% Protection Level
Index Value at beginning of term = 1,569
Indexed Crediting Base = $100,000
Indexed Term Segment End Date = 1/8/2027
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Index Value percentage change = -15% ((1,333 – 1,569) / 1569)
Indexed Crediting Base = $95,000
Indexed Term Segment End Date = 1/8/2028
Index Value at End Date = 1,298
Index Value percentage change = -3% ((1,298 – 1,333)/1,333)
Indexed Segment Ending Value = $95,000 ($95,000 - $0)
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Reallocating To |
Reallocating From | |
|
1-Year Term |
6-Year Term | |
|
1-Year Term |
Allowed on any
Indexed Anniversary Date |
Allowed on any
Indexed Anniversary Date |
|
6-Year Term |
Allowed only on every 6th
Indexed Anniversary Date |
Allowed only on every 6th
Indexed Anniversary Date |
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4/1/2030 Interim Value is $120,000
4/1/2030 The Contractowner decides to lock-in the $120,000 Interim Value
5/1/2030 Crediting Base is reset to $120,000
4/1/2030 Interim Value is $90,000
4/1/2030 The Contractowner decides to lock-in the $90,000 Interim Value
5/1/2030 Crediting Base is reset to $90,000
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Charges and Adjustments
We will deduct the charges described below to cover our costs and expenses, services provided and risks assumed under the contracts. We incur certain costs and expenses for the distribution and administration of the contracts and for providing the benefits payable thereunder.
Our administrative services include:
●
processing applications for and issuing contracts;
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processing purchases and redemptions from Indexed Accounts as required (including automatic withdrawal services if available – See Additional Services and the SAI for more information on this program);
●
maintaining records;
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administering Annuity Payouts;
●
furnishing accounting and valuation services (including the calculation and monitoring of daily Indexed Contract Values and Interim Values);
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reconciling and depositing cash receipts;
●
providing contract confirmations;
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providing toll-free inquiry services; and
●
furnishing telephone and other electronic surrenders, withdrawals and reallocations.
The risks we assume include:
●
the risk that Annuitants upon which Annuity Payouts are based live longer than we assumed when we calculated our guaranteed rates (these rates are stated in the Contract and cannot be changed);
●
the risk that our costs in providing the services will exceed our revenues from contract charges (which we cannot change);
●
the risks related to supporting and replicating Indexed Account performance with our assets.
The amount of a charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the description of the charge. Any remaining expenses will be paid from our general account which may consist, among other things, of proceeds derived from the base contract expenses deducted from the account. We may profit from the charges deducted under the Contract and from amounts earned on the Indexed Accounts. We may use these profits for any corporate purpose, including financing the distribution of the Contracts.
Obligations under the Contracts that are funded by our general account include 1) the obligation to pay Death Benefits that exceed the Contract Value; 2) the obligation to pay Annuity Payouts that exceed the Contract Value; and 3) our obligations under the Indexed Accounts. Payment of these benefits and obligations is subject to our claims-paying ability and financial strength. We are also responsible for providing for all of the administrative services necessary in connection with the Contract (and bearing all of the associated expenses).
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Deductions for Premium Taxes
Any premium tax or other tax levied by any governmental entity as a result of the existence of the contracts will be deducted from the Contract Value, unless the governmental entity dictates otherwise, when incurred, or at another time of our choosing.
The applicable premium tax rates that states and other governmental entities impose on the purchase of an annuity are subject to change by legislation, by administrative interpretation or by judicial action. These premium tax rates generally depend upon the law of your state of residence. Currently, there is no premium tax levied for New York residents.
The Contracts
Purchase of Contracts
This Contract is issued as part of a Fee-Based Financial Plan. A Fee-Based Financial Plan generally refers to a wrap account, managed account or other investment program whereby an investment firm/professional offers asset allocation and/or investment advice for a fee. This fee is in addition to contract fees and expenses. Such programs can be offered by broker-dealers, banks and registered investment advisers, trust companies and other firms. Under this arrangement, the Contractowner pays the investment firm/professional directly for services. You may be able to pay this fee by taking advisory fee withdrawals from your Contract Value. If you elect to pay third-party advisory fees out of your Contract Value, each deduction will be treated as a withdrawal and will reduce your Death Benefit. In addition, each deduction will be treated as an early withdrawal and may be subject to a negative Contract Adjustment and may be subject to federal and state income taxes and a 10% federal penalty tax. See Federal Tax Matters – Payment of Investment Advisory Fees.
If you wish to purchase a Contract, you must apply for it through a financial professional authorized by us. The completed application is sent to us and we decide whether to accept or reject it. If the application is accepted, a Contract is prepared and executed by our legally authorized officers. The Contract is then sent to you either directly or through your financial professional. See Distribution of the Contracts. The purchase of multiple contracts with identical Contractowners, Annuitants and Beneficiaries will be allowed only upon Home Office approval.
Who Can Invest
To apply for a contract, you must be of legal age in a state where the contracts may be lawfully sold and also be eligible to participate in any of the qualified or nonqualified plans for which the contracts are designed. At the time of issue, the Contractowner, joint owner and Annuitant must be under age 86. Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account in an effort to help the government fight the funding of terrorism and money laundering activities. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license, photo i.d. or other identifying documents.
In accordance with anti-money laundering laws and federal economic sanction policy, the Company may be required in a given instance to reject a Purchase Payment and/or freeze a Contractowner’s account. This means we could refuse to honor requests for transfers, withdrawals, surrenders or Death Benefits. Once frozen, monies would be moved from the Indexed Account to an interest-bearing account maintained solely for the Contractowner, and held in that account until instructions are received from the appropriate regulator.
Do not purchase the Contract if you plan to use it, or any of its riders, for speculation, arbitrage, viatical arrangement, or other similar investment scheme. The Contract may not be resold, traded on any stock exchange, or sold on any secondary market.
If you are purchasing the Contract through a tax-favored arrangement, including traditional IRAs and Roth IRAs, you should consider carefully the costs and benefits of the Contract (including annuity income benefits) before purchasing the Contract, since the tax-favored arrangement itself provides tax-deferred growth.
Replacement of Existing Insurance
Careful consideration should be given prior to surrendering or withdrawing money from an existing insurance contract to purchase a Contract described in this prospectus. Surrender charges may be imposed on your existing contract. The benefits offered under this Contract may be less favorable or more favorable than the benefits offered under your current contract. It also may have different charges. You should consult with your financial professional and/or your tax advisor prior to making an exchange. Cash surrenders from an existing contract may be subject to tax and tax penalties.
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Purchase Payment
The minimum Purchase Payment is $25,000. We do not accept additional Purchase Payments after the Contract has been issued to you. Accordingly, you will be unable to increase your Contract Value or Death Benefit by making subsequent Purchase Payments. If the Purchase Payment submitted does not meet the minimum amount, we will contact you to ask whether additional money will be sent, or whether we should return the Purchase Payment to you. Any funds received after 45 days from the date you signed your application (or submitted an electronic application) will be returned to you.
If we choose to extend that time period, the 45-day rate hold period will expire and the crediting rates currently in effect would apply. Any funds received after your Contract has been issued will be returned to you. You can find the crediting rates currently in effect at www.lfg.com/llarates or by calling us at 1-877-737-6872.
You must obtain approval for a Purchase Payment totaling $1 million or more. This amount takes into consideration the total Purchase Payments for all existing Lincoln Level Advantage®, Lincoln Level Advantage 2® and Lincoln Level Advantage 2 IncomeSM contracts for the same Contractowner, joint owner, and/or Annuitant. At the Company’s discretion, this amount may consider total Purchase Payments for all annuity contracts issued by the Company (or its affiliates) for the same Contractowner, joint owner, and/or Annuitant.
Valuation Date
Indexed Segments will be valued once daily at the close of regular trading (normally, 4:00 p.m., Eastern Time) on each day the New York Stock Exchange is open (Valuation Date). On any date other than a Valuation Date, the value of the Indexed Segment will not change.
Allocation of the Purchase Payment
The Purchase Payment will be allocated, according to your instructions, among one or more of the Indexed Accounts available under your Contract. The minimum amount that may be allocated into an Indexed Account is $2,000.
The Contract effective date will be the date on which money is first applied to the Indexed Accounts to establish the initial Indexed Term and will be the Indexed Anniversary Date. After the Indexed Anniversary Date is established, that is the only date each year that allocations can be invested in the Indexed Accounts. Your Contract will be issued, at the earlier of, when the entire Purchase Payment is received or no later than the 45th calendar day after the date you signed your application (or submitted an electronic application), provided the minimum Purchase Payment requirement was met. All funds received on or prior to the Contract effective date will be considered your Purchase Payment.
If the last day to issue your contract is not a business day, the Contract effective date and the initial Indexed Value for your Indexed Segments will be the closing value of the next Valuation Date. Excluding February 29th, any calendar date can be a Contract Date, Indexed Anniversary Date, or Valuation Date.
The rates for the initial Indexed Segments you selected will be determined based on any applicable crediting rate hold restrictions. For current crediting rate hold restrictions please call us at 1-877-737-6872. Current rates are available on our website at www.lfg.com/llarates.
Telephone and Electronic Transactions
A surrender, withdrawal, or reallocation request may be made to our Servicing Office in writing or by fax. These transactions may also be made by telephone or other electronic means, provided the appropriate authorization is on file with us. In order to prevent unauthorized or fraudulent transfers, we may require certain identifying information before we will act upon instructions. We may also assign the Contractowner a Personal Identification Number (PIN) to serve as identification. We will not be liable for following instructions we reasonably believe are genuine. Telephone and other electronic requests will be recorded and written confirmation of all transactions will be mailed or sent electronically to the Contractowner on the next Valuation Date.
Please note that the telephone and/or electronic devices may not always be available. Any telephone, fax machine, or other electronic device, whether it is yours, your service provider’s, or your financial professional’s, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request by writing to our Servicing Office.
Ownership
The Contractowner on the date of issue will be the person or entity designated in the contract specifications. The Contractowner of a nonqualified contract may name a joint owner. We reserve the right to limit certain types of ownership structures. Please contact your financial professional for more information.
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As Contractowner, you have all rights under the Contract. We reserve the right to approve all ownership and Annuitant changes. A transfer of ownership, or a revocation of transfer, must be provided in a notice to the Servicing Office. When a notice to transfer or revocation is received, any allowable change will take effect as of the date the notice was signed by the Owner, unless otherwise specified by the Owner. The change in ownership is subject to any payments made or any action taken or allowed by us before the transfer or the revocation is received.
This Contract may be assigned or transferred. We will not be bound by any assignment unless notice of the assignment is provided at the Servicing Office. The effective date of the assignment will be the date it is signed by the Owner unless otherwise specified by the Owner. The change is subject to any payments made or actions taken or allowed by us before the assignment is received. We will not be responsible for the validity of any assignment.
Nonqualified contracts may not be sold, discounted, or pledged as collateral for a loan or for any other purpose. Qualified contracts are not transferable unless allowed under applicable law. Nonqualified contracts may not be collaterally assigned. Assignments may have an adverse impact on your Death Benefits and may be prohibited under the terms of a particular feature. We assume no responsibility for the validity or effect of any assignment. Consult your tax advisor about the tax consequences of an assignment.
Joint Ownership
If a Contract has joint owners, the joint owners shall be treated as having equal undivided interests in the Contract. Either owner, independently of the other, may exercise any ownership rights in this Contract. Not more than two owners (an owner and joint owner) may be named and contingent owners are not permitted.
Annuitant
The following rules apply prior to the Annuity Commencement Date. You may name only one Annuitant (unless you are a tax-exempt entity, then you can name two joint Annuitants). You (if the Contractowner is a natural person) have the right to change the Annuitant at any time by notifying us in writing of the change. However, we reserve the right to approve all Annuitant changes. This may not be allowed if certain riders are in effect. The new Annuitant must be under age 86 as of the effective date of the change. A contingent Annuitant may be named or changed by notifying us in writing. Contingent Annuitants are not allowed on contracts owned by non-natural owners. On or after the Annuity Commencement Date, the Annuitant or joint Annuitants may not be changed and contingent Annuitant designations are no longer applicable.
Surrenders and Withdrawals
Before the Annuity Commencement Date, we will allow the surrender of the Contract or a withdrawal of the Contract Value upon your written request on an approved Lincoln distribution request form (available from the Servicing Office), fax, or other electronic means approved by Lincoln. Withdrawal requests may be made by telephone, subject to certain restrictions. All surrenders and withdrawals may be made in accordance with the rules discussed below. Surrender or withdrawal rights after the Annuity Commencement Date are not available.
The amount available upon surrender/withdrawal is the Contract Value less any applicable charges, fees, and taxes at the end of the Valuation Period during which the written request for surrender/withdrawal is received in Good Order at the Servicing Office. If we receive a surrender or withdrawal request in Good Order at our Servicing Office before the close of the NYSE (normally 4:00 p.m., Eastern Time), we will process the request from the Interim Value computed on that Valuation Date. If we receive a surrender or withdrawal request in Good Order at our Servicing Office after market close, we will process the request using the Interim Value computed on the next Valuation Date. There may be circumstances under which the NYSE may close early (prior to 4:00 p.m., Eastern Time). In such instances, surrender or withdrawal requests received after such early market close will be processed using the Interim Value computed on the next Valuation Date. The minimum amount which can be withdrawn is $300.
Prior to the End Date of the Indexed Segment, an amount equal to the Interim Value of the Indexed Segment is available for surrender or withdrawal. In addition, the Indexed Crediting Base for each individual Indexed Segment is reduced proportionately by the amount that the withdrawal reduced the Interim Value. A proportional reduction could be larger than the dollar amount of the withdrawal. Reductions to your Indexed Crediting Base will negatively impact your Interim Value for the remainder of the Indexed Term and will result in a lower Segment Ending Value at the end of the Indexed Term. You cannot withdraw an amount equal to the Indexed Crediting Base. The following examples show how the Indexed Crediting Base is impacted by a withdrawal.
Example 1:
1/1/2026 Allocation to Indexed Segment = $80,000
1/1/2026 Indexed Crediting Base = $80,000
6/1/2026 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
1/1/2026 Indexed Crediting Base = $80,000
6/1/2026 Indexed Crediting Base = $80,000; Interim Value = $100,000; Withdrawal = $80,000
Withdrawal/Interim Value = $80,000 ÷ $100,000 = 80%
Removed Amount from the Indexed Crediting Base = $64,000 (80% of $80,000)
Indexed Crediting Base after withdrawal = $80,000 - $64,000 = $16,000
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Interim Value after withdrawal ($100,000 - $80,000) = $20,000
Interim Value calculation going forward and Segment Ending Value will be based on the $16,000 Indexed Crediting Base
Interim Value calculation going forward and Segment Ending Value will be based on the $16,000 Indexed Crediting Base
Example 2:
Indexed Crediting Base = $16,000; Interim Value = $15,000; Withdrawal = $15,000
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Withdrawal/Interim Value = $15,000 ÷ $15,000 = 100%
Removed Amount from the Indexed Crediting Base = $16,000 (100% of $16,000)
Indexed Crediting Base after withdrawal = $0
Interim Value after withdrawal = $0 ($15,000 - $15,000)
Note: The $15,000 Interim Value is the maximum that could be withdrawn during the Indexed Term. The Indexed Crediting Base is not available for withdrawal or transfer.
The tax consequences of a surrender/withdrawal are discussed later in this prospectus. See Federal Tax Matters – Taxation of Withdrawals and Surrenders.
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Standard Benefits | |||
|
Name of Benefit |
Purpose |
Maximum Fee |
Brief Description of Restrictions /
Limitations |
|
|
|
|
|
|
|
|
|
|
|
upon death of: |
and... |
and... |
Death Benefit proceeds pass to: |
|
Contractowner |
There is a surviving joint owner |
The Annuitant is living or deceased |
Joint owner |
|
Contractowner |
There is no surviving joint owner |
The Annuitant is living or deceased |
Designated Beneficiary |
|
Contractowner |
There is no surviving joint owner
and the Beneficiary predeceases the
Contractowner |
The Annuitant is living or deceased |
Contractowner's estate |
|
Annuitant |
The Contractowner is living |
There is no contingent Annuitant |
The youngest Contractowner
becomes the contingent Annuitant
and the Contract continues. The
Contractowner may waive* this
continuation and receive the Death
Benefit proceeds. |
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|
upon death of: |
and... |
and... |
Death Benefit proceeds pass to: |
|
Annuitant |
The Contractowner is living |
The contingent Annuitant is living |
Contingent Annuitant becomes the
Annuitant and the Contract
continues |
|
Annuitant** |
The Contractowner is a trust or
other non-natural person |
No contingent Annuitant allowed
with non-natural Contractowner |
Designated Beneficiary |
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Abandoned Property. Every state has unclaimed property laws which generally declare annuity contracts to be abandoned after a period of inactivity of three to five years from the date a benefit is due and payable. For example, if the payment of a Death Benefit has been triggered, but, if after a thorough search, we are still unable to locate the Beneficiary of the Death Benefit, or the Beneficiary does not come forward to claim the Death Benefit in a timely manner, the Death Benefit will be “escheated”. This means that the Death Benefit will be paid to the abandoned property division or unclaimed property office of the state in which the Beneficiary or the Contractowner last resided, as shown on our books and records, or to our state of domicile. This escheatment is revocable and the state is obligated to pay the Death Benefit (without interest) if your Beneficiary steps forward to claim it with the proper documentation.
To prevent such escheatment, it is important that you update your Beneficiary designations, including addresses, if and as they change. You may update your Beneficiary designations by submitting a Beneficiary change form to our Servicing Office.
Additional Service
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Fees Associated with Fee-Based Financial Plans. You have purchased this Contract as part of a Fee-Based Financial Plan whereby an investment firm or professional offers investment advice for a fee. The fee for this advice is set by your financial professional, and is covered in a separate agreement between you and your financial professional. Lincoln has not made any independent review of your financial professional. You may provide authorization to have your advisory fees paid to your financial professional’s investment firm from your Contract Value, if certain conditions apply. These payments will be treated as withdrawals from your Contract Value and may result in a significant reduction in your Death Benefit. Over time, withdrawals taken for the payment of advisory fees could significantly reduce your Contract Value. Please discuss with your financial professional the impact of deducting advisory fees from Contract Value prior to making an election.
Partial withdrawals to pay the fee may be taken automatically by enrolling in an AWS designated specifically for this purpose. Withdrawals are available in monthly, quarterly, semi-annual, or annual frequencies. You may enroll in this service by completing the appropriate authorization form that is available from your financial professional. Additionally, you may authorize your financial professional to set up or change your AWS program, or to take one-time withdrawals to pay for the advisory fee. Once you have elected this service, it will continue until you instruct us in writing to terminate it. Withdrawals under this AWS option and one time withdrawals will be noted on your quarterly statement as an advisory fee withdrawal. This AWS service may not be available through all broker-dealers.
Withdrawals under AWS are treated like other withdrawals under the Contract, and as such may decrease your guarantees under a Death Benefit. See the Death Benefit sections of this prospectus for more information on how withdrawals affect these benefits. Advisory fee withdrawals will not be treated as a distribution for federal tax purposes, if certain conditions are met. See Federal Tax Matters – Taxation of Withdrawals and Surrenders for more information. Regardless of how the advisory fee withdrawal is treated for federal tax purposes, an advisory fee withdrawal from the Contract will always reduce the Contract Value and Contract Value portion of the elected Death Benefit on a dollar-for-dollar basis.
Annuity Payouts
Your Contract Value invested in the Indexed Accounts must be transferred to a fixed Annuity Payout prior to the Annuity Commencement Date. See Principal Risks of Investing in the Contract. When you apply for a Contract, you may select any Annuity Commencement Date permitted by law, which is usually on or before the Annuitant's 99th birthday. Your financial professional may recommend that you annuitize at an earlier age.
The Contract provides optional forms of payouts of annuities (annuity options). The Indexed Accounts are not available as Annuity Payout options. The Contract provides that all of the Contract Value may be used to purchase an Annuity Payout option.
You may elect Annuity Payouts in monthly, quarterly, semiannual or annual installments. Following are explanations of the annuity options available.
Annuity Options
Life Annuity. This option offers a periodic payout during the lifetime of the Annuitant and ends with the last payout before the death of the Annuitant. This option offers the highest periodic payout since there is no guarantee of a minimum number of payouts or provision for a Death Benefit for Beneficiaries. However, there is the risk under this option that the recipient would receive no payouts if the Annuitant dies before the date set for the first payout; only one payout if death occurs before the second scheduled payout, and so on.
Life Annuity with Period Certain. This option guarantees periodic payouts during a designated period, usually 10 or 20 years, and then continues throughout the lifetime of the Annuitant. The designated period is selected by the Contractowner.
Joint Life Annuity. This option offers a periodic payout during the joint lifetime of the Annuitant and a designated joint Annuitant. The payouts continue during the lifetime of the survivor. However, under a joint life annuity, if both Annuitants die before the date set for the first payout, no payouts will be made. Only one payment would be made if both deaths occur before the second scheduled payout, and so on.
Joint Life Annuity with Period Certain. This option guarantees periodic payouts during a designated period, usually 10 or 20 years, and continues during the joint lifetime of the Annuitant and a designated joint Annuitant. The payouts continue during the lifetime of the survivor. The designated period is selected by the Contractowner.
Joint Life and Two Thirds to Survivor Annuity. This option provides a periodic payout during the joint lifetime of the Annuitant and a designated joint Annuitant. When one of the joint Annuitants dies, the survivor receives two thirds of the periodic payout made when both were alive.
Joint Life and Two-Thirds Survivor Annuity with Period Certain. This option provides a periodic payout during the joint lifetime of the Annuitant and a designated joint Annuitant. When one of the joint Annuitants dies, the survivor receives two-thirds of the periodic payout made when both were alive. This option further provides that should one or both of the Annuitants die during the elected guaranteed period, usually 10 or 20 years, full benefit payment will continue for the rest of the guaranteed period.
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Life Annuity with Cash Refund. This option provides fixed annuity benefit payments that will be made for the lifetime of the Annuitant with the guarantee that upon death, should (a) the total dollar amount applied to purchase this option be greater than (b) the fixed annuity benefit payment multiplied by the number of annuity benefit payments paid prior to death, then a refund payment equal to the dollar amount of (a) minus (b) will be made.
Under the annuity options listed above, you may not make withdrawals. Other options, with or without withdrawal features, may be made available by us. You may pre-select an Annuity Payout option as a method of paying the Death Benefit to a Beneficiary. If you do, the Beneficiary cannot change this payout option. You may change or revoke in writing to our Servicing Office, any such selection, unless such selection was made irrevocable. If you have not already chosen an Annuity Payout option, the Beneficiary may choose any Annuity Payout option. At death, options are only available to the extent they are consistent with the requirements of the Contract as well as Sections 72(s) and 401(a)(9) of the tax code, if applicable.
General Information
Any previously selected Death Benefit in effect before the Annuity Commencement Date will no longer be available on and after the Annuity Commencement Date. Any portion of your Contract Value invested in the Indexed Accounts must be moved to a fixed Annuity Payout prior to the Annuity Commencement Date. You may change the Annuity Commencement Date or change the annuity option up to 30 days before the scheduled Annuity Commencement Date, upon written notice to the Home Office. You must give us at least 30 days’ notice before the date on which you want payouts to begin. We may require proof of age, sex, or survival of any payee upon whose age, sex, or survival payments depend.
Unless you select another option, the Contract automatically provides for a life annuity with Annuity Payouts guaranteed for 10 years (on a fixed basis) except when a joint life payout is required by law. Under any option providing for guaranteed period payouts, the number of payouts which remain unpaid at the date of the Annuitant’s death (or surviving Annuitant’s death in case of joint life Annuity) will be paid to you or your Beneficiary as payouts become due after we are in receipt of:
●
proof of the death, satisfactory to us;
●
written authorization for payment; and
●
all claim forms, fully completed.
Small Contract Surrenders
We may surrender your Contract, in accordance with New York law if:
●
your Contract Value drops below certain state specified minimum amounts ($2,000 or less) for any reason, including if your Contract Value decreases due to the performance of the Indexed Accounts you selected; and
●
the annuity benefit at the Annuity Commencement Date would be less than $20.00 per month.
At least 60 days before we surrender your Contract, we will send you a letter at your last address we have on file, to inform you that your Contract will be surrendered. Surrenders from the Indexed Accounts will be calculated using the Interim Value.
Delay of Payments
Due to federal laws designed to counter terrorism and prevent money laundering by criminals, we may be required to reject a Purchase Payment and/or deny payment of a request for transfers, withdrawals, surrenders, or Death Benefits, until instructions are received from the appropriate regulator. We also may be required to provide additional information about a Contractowner's account to government regulators.
Amendment of Contract
We reserve the right to amend the Contract to meet the requirements of applicable federal or state laws or regulations. You will be notified in writing of any changes, modifications or waivers. Any changes are subject to prior approval of your state’s insurance department (if required).
Distribution of the Contracts
Lincoln Financial Distributors, Inc. (“LFD”) serves as Principal Underwriter of this Contract. LFD is affiliated with Lincoln New York and is registered as a broker-dealer with the SEC under the Securities Exchange Act of 1934 and is a member of FINRA (Financial Industry Regulatory Authority). The Principal Underwriter has entered into selling agreements with broker-dealers that are unaffiliated with us (“Selling Firms”). While the Principal Underwriter has the legal authority to make payments to broker-dealers which have entered into selling agreements, we will make such payments on behalf of the Principal Underwriter in compliance with appropriate regulations. We also pay on behalf of LFD certain of its operating expenses related to the distribution of this and other of our contracts. The Principal Underwriter may also offer “non-cash compensation”, as defined under FINRA’s rules, which includes among other things, merchandise, gifts, marketing support, sponsorships, seminars, entertainment and travel expenses. You should ask your financial professional how the broker-dealer will be compensated for the sale of the Contract to you, or for any alternative proposal
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that may have been presented to you. You should take such compensation into account when considering and evaluating any recommendation made to you in connection with the purchase of a Contract. The following paragraphs describe how payments are made by us and the Principal Underwriter to various parties. No commissions are paid to financial intermediaries in connection with the sale of this Contract because such intermediaries receive compensation in the form of advisory fees paid by Contractowners.
Compensation Paid to Selling Firms. LFD also acts as wholesaler of the contracts and performs certain marketing and other functions in support of the distribution and servicing of the contracts. LFD may pay certain Selling Firms or their affiliates additional amounts for, among other things: (1) “preferred product” treatment of the contracts in their marketing programs, which may include marketing services and increased access to financial professionals; (2) sales incentives relating to the contracts; (3) costs associated with sales conferences and educational seminars for their financial professionals; (4) other sales expenses incurred by them; and (5) inclusion in the financial products the Selling Firm offers.
Lincoln New York may provide loans to broker-dealers or their affiliates to help finance marketing and distribution of the contracts, and those loans may be forgiven if aggregate sales goals are met. In addition, we may provide staffing or other administrative support and services to broker-dealers who distribute the contracts. LFD, as wholesaler, may make bonus payments to certain Selling Firms based on aggregate sales of our variable insurance contracts (including the contracts) or persistency standards.
These additional types of compensation are not offered to all Selling Firms. The terms of any particular agreement governing compensation may vary among Selling Firms and the amounts may be significant. The prospect of receiving, or the receipt of, additional compensation may provide Selling Firms and/or their financial professionals with an incentive to favor sales of the contracts over other variable annuity contracts (or other investments) with respect to which a Selling Firm receives lower levels of or no additional compensation. You may wish to take such payment arrangements into account when considering and evaluating any recommendation relating to the contracts.
Compensation Paid to Other Parties. Depending on the particular selling arrangements, there may be others whom LFD compensates for the distribution activities. For example, LFD may compensate certain “wholesalers”, who control access to certain selling offices, for access to those offices or for referrals, and that compensation may be separate from the compensation paid for sales of the contracts. LFD may compensate marketing organizations, associations, brokers or consultants which provide marketing assistance and other services to broker-dealers who distribute the contracts, and which may be affiliated with those broker-dealers. Commissions and other incentives or payments described above are not charged directly to Contractowners. All compensation is paid from our resources, which include fees and charges imposed on your Contract.
We pay an education and support fee to First Trust Portfolios L.P. (First Trust) for their educational and sales support in connection with the First Trust Capital Strength Methodology contained within the Capital Strength Net Fee IndexSM. This fee is an annual fee of 0.15% of the average daily value of the amount invested in the Capital Strength Indexed Accounts. First Trust will pay Lincoln an annual rate of 0.05% of the average daily value of the amount invested in the Capital Strength Indexed Accounts to compensate Lincoln for the expenses it incurs in assisting First Trust as it provides this education and support. These payments are not charged directly to Contractowners, but are paid from our resources.
We pay a licensing fee to FTIS in the amount of 0.045%, and we pay an education and support fee in the amount of 0.150% to First Trust Portfolios L.P. in connection with the First Trust American Leadership Index. These fees are based on the average monthly value of the amount invested in the First Trust American Leadership Indexed Accounts. These payments are not charged directly to Contractowners but are paid from our resources.
Contractowner Questions
The obligations to purchasers under the contracts are those of Lincoln New York. This prospectus provides a general description of the material features of the Contract. Contracts, endorsements and riders may vary as required by state law. Questions about your Contract should be directed to us at 1-877-737-6872.
Federal Tax Matters
Introduction
The Federal income tax treatment of the Contract is complex and sometimes uncertain. The Federal income tax rules may vary with your particular circumstances. This discussion does not include all the Federal income tax rules that may affect you and your Contract. This discussion also does not address other Federal tax consequences (including consequences of sales to foreign individuals or entities), or state or local tax consequences, associated with the Contract. As a result, you should always consult a tax advisor about the application of tax rules found in the Internal Revenue Code (“Code”), Treasury Regulations and applicable IRS guidance to your individual situation.
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Nonqualified Annuities
This part of the discussion describes some of the Federal income tax rules applicable to nonqualified annuities. A nonqualified annuity is a contract not issued in connection with a qualified retirement plan, such as an IRA or a section 403(b) plan, receiving special tax treatment under the Code. We may not offer nonqualified annuities for all of our annuity products.
Tax Deferral On Earnings
Under the Code, you are generally not subject to tax on any increase in your Contract Value until you receive a contract distribution. However, for this general rule to apply, certain requirements must be satisfied:
●
An individual must own the Contract (or the Code must treat the Contract as owned by an individual).
●
Your right to choose particular investments for a Contract must be limited.
●
The Annuity Commencement Date must not occur near the end of the Annuitant’s life expectancy.
Contracts Not Owned By An Individual
If a Contract is owned by an entity (rather than an individual) the Code generally does not treat it as an annuity contract for Federal income tax purposes. This means that the entity owning the Contract pays tax currently on the excess of the Contract Value over the investment in the Contract. Examples of contracts where the owner pays current tax on the Contract’s earnings are contracts issued to a corporation or a trust. Some exceptions to the rule are:
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Contracts in which the named owner is a trust or other entity that holds the Contract as an agent for an individual; however, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees;
●
Immediate annuity contracts, purchased with a single premium, when the annuity starting date is no later than a year from purchase and substantially equal periodic payments are made, not less frequently than annually, during the Annuity Payout period;
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Contracts acquired by an estate of a decedent;
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Certain qualified contracts;
●
Contracts purchased by employers upon the termination of certain qualified plans; and
●
Certain contracts used in connection with structured settlement agreements.
Restrictions
The Code limits your right to choose particular investments for the Contract. Because the IRS has issued little guidance specifying those limits, the limits are uncertain. We do not know what limits may be set by the IRS in any guidance that it may issue and whether any such limits will apply to existing contracts.
Loss Of Interest Deduction
After June 8, 1997, if a Contract is issued to a taxpayer that is not an individual, or if a Contract is held for the benefit of an entity, the entity may lose a portion of its deduction for otherwise deductible interest expenses. However, this rule does not apply to a Contract owned by an entity engaged in a trade or business that covers the life of one individual who is either (i) a 20% Owner of the entity, or (ii) an officer, director, or employee of the trade or business, at the time first covered by the Contract. This rule also does not apply to a Contract owned by an entity engaged in a trade or business that covers the joint lives of the 20% Owner or the entity and the Owner’s spouse at the time first covered by the Contract.
Age At Which Annuity Payouts Begin
The Code does not expressly identify a particular age by which Annuity Payouts must begin. However, those rules do require that an annuity contract provide for amortization, through Annuity Payouts, of the Contract’s Purchase Payment and earnings. As long as annuity payments begin or are scheduled to begin on a date on which the Annuitant’s remaining life expectancy is enough to allow for a sufficient Annuity Payout period, the Contract should be treated as an annuity. If the annuity contract is not treated as an annuity, you would be currently taxed on the excess of the Contract Value over the investment in the Contract.
Tax Treatment Of Payments
We make no guarantees regarding the tax treatment of any Contract or of any transaction involving a Contract. However, the rest of this discussion assumes that your Contract will be treated as an annuity under the Code and that any increase in your Contract Value will not be taxed until there is a distribution from your Contract.
Taxation Of Withdrawals And Surrenders
You will pay tax on withdrawals to the extent your Contract Value exceeds your investment in the Contract. This income (and all other income from your Contract) is considered ordinary income (and does not receive capital gains treatment and is not qualified dividend income). You will pay tax on a surrender to the extent the amount you receive exceeds your investment in the Contract. In certain circumstances, your Purchase Payment and investment in the Contract are reduced by amounts received from your Contract that were not included in income.
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Payment of Investment Advisory Fees
On August 6, 2019, the IRS issued a private letter ruling (the “PLR”) to Lincoln that addressed the treatment of investment advisory fees paid out of the cash value of a non-qualified annuity contract. The PLR concluded that if a Contractowner authorizes payment of investment advisory fees out of the cash value of the non-qualified annuity contract, the payment of those fees will not be treated as a distribution to the Contractowner. In order for this treatment to apply, the investment advisory fees must be determined based on an arms-length transaction between the Contractowner and the financial professional, and cannot exceed an amount equal to an annual rate of 1.50% of the non-qualified annuity contract’s cash value. The fees can only compensate the financial professional for investment advice provided to the Contractowner with respect to the non-qualified annuity contract, and cannot compensate the financial professional for any other services. Effective for tax year 2019 and beyond, if you have authorized Lincoln to pay fees from the cash value of your non-qualified annuity Contract directly to your financial professional, Lincoln will not treat the payment of such fees as a distribution from your Contract if all the conditions mentioned above are satisfied.
This PLR only applies to distributions from non-qualified annuity contract; it does not apply to distributions from qualified contracts. Please see the Tax Treatment of Payments section under the Qualified Retirement Plans section below for future information regarding distributions from Qualified Plans.
Taxation Of Annuity Payouts
The Code imposes tax on a portion of each Annuity Payout (at ordinary income tax rates) and treats a portion as a nontaxable return of your investment in the Contract. We will notify you annually of the taxable amount of your Annuity Payout. Once you have recovered the total amount of the investment in the Contract, you will pay tax on the full amount of your Annuity Payouts. If Annuity Payouts end because of the Annuitant’s death and before the total amount in the Contract has been distributed, the amount not received will generally be deductible.
Taxation Of Death Benefits
We may distribute amounts from your Contract because of the death of a Contractowner or an Annuitant. The tax treatment of these amounts depends on whether the Contractowner or the Annuitant dies before or after the Annuity Commencement Date.
Death prior to the Annuity Commencement Date:
●
If the Beneficiary receives Death Benefits under an Annuity Payout option, they are taxed in the same manner as Annuity Payouts.
●
If the Beneficiary does not receive Death Benefits under an Annuity Payout option, they are taxed in the same manner as a withdrawal.
Death after the Annuity Commencement Date:
●
If Death Benefits are received in accordance with the existing Annuity Payout option following the death of a Contractowner who is not the Annuitant, they are excludible from income in the same manner as the Annuity Payout prior to the death of the Contractowner.
●
If Death Benefits are received in accordance with the existing Annuity Payout option following the death of the Annuitant (whether or not the Annuitant is also the Contractowner), the Death Benefits are excludible from income if they do not exceed the investment in the Contract not yet distributed from the Contract. All Annuity Payouts in excess of the investment in the Contract not previously received are includible in income.
●
If Death Benefits are received in a lump sum, the Code imposes tax on the amount of Death Benefits which exceeds the amount of the Purchase Payment not previously received.
Additional Taxes Payable On Withdrawals, Surrenders, Or Annuity Payouts
The Code may impose a 10% additional tax on any distribution from your Contract which you must include in your gross income. The 10% additional tax does not apply if one of several exceptions exists. These exceptions include withdrawals, surrenders, or Annuity Payouts that:
●
you receive on or after you reach 59½,
●
you receive because you became disabled (as defined in the Code),
●
you receive from an immediate annuity,
●
a Beneficiary receives on or after your death, or
●
you receive as a series of substantially equal periodic payments based on your life or life expectancy (non-natural owners holding as agent for an individual do not qualify).
Unearned Income Medicare Contribution
Congress enacted the “Unearned Income Medicare Contribution” as a part of the Health Care and Education Reconciliation Act of 2010. This tax, which affects individuals whose modified adjusted gross income exceeds certain thresholds, is a 3.8% tax on the lesser of (i) the individual's “unearned income,” or (ii) the dollar amount by which the individual's modified adjusted gross income
44
exceeds the applicable threshold. Unearned income includes the taxable portion of distributions that you take from your annuity contract. If you take a distribution from your Contract that may be subject to the tax, we will include a Distribution Code “D” in Box 7 of the Form 1099-R issued to report the distribution. Please consult your tax advisor to determine whether your annuity distributions are subject to this tax.
Special Rules If You Own More Than One Annuity Contract
In certain circumstances, you must combine some or all of the nonqualified annuity contracts you own in order to determine the amount of an Annuity Payout, a surrender, or a withdrawal that you must include in income. For example, if you purchase two or more deferred annuity contracts from the same life insurance company (or its affiliates) during any calendar year, the Code treats all such contracts as one contract. Treating two or more contracts as one contract could affect the amount of a surrender, a withdrawal or an Annuity Payout that you must include in income and the amount that might be subject to the additional tax described previously.
Loans and Assignments
Except for certain qualified contracts, the Code treats any amount received as a loan under your Contract, and any assignment or pledge (or agreement to assign or pledge) of any portion of your Contract Value, as a withdrawal of such amount or portion.
Gifting A Contract
If you transfer ownership of your Contract to a person other than to your spouse (or to your former spouse incident to divorce), and receive a payment less than your Contract’s value, you will pay tax on your Contract Value to the extent it exceeds your investment in the Contract not previously received. The new owner’s investment in the Contract would then be increased to reflect the amount included in income.
Charges for Additional Benefits
Your Contract automatically includes a basic Death Benefit and may include other optional riders. Certain enhancements to the basic Death Benefit may also be available to you. The cost of the basic Death Benefit and any additional benefit are deducted from your Contract. It is possible that the tax law may treat all or a portion of the Death Benefit and other optional rider charges, if any, as a contract withdrawal.
Special Considerations for Same-Sex Spouses
In 2013, the U.S. Supreme Court held that same-sex spouses who are married under state law are treated as spouses for purposes of federal law. You are strongly encouraged to consult a tax advisor before electing spousal rights under the Contract.
Qualified Retirement Plans
We have designed the contracts for use in connection with certain types of retirement plans that receive favorable treatment under the Code. Contracts issued to or in connection with a qualified retirement plan are called “qualified contracts.” We issue contracts for use with various types of qualified retirement plans. The Federal income tax rules applicable to those plans are complex and varied. As a result, this prospectus does not attempt to provide more than general information about the use of the Contract with the various types of qualified retirement plans. Persons planning to use the Contract in connection with a qualified retirement plan should obtain advice from a competent tax advisor.
Types of Qualified Contracts and Terms of Contracts
Qualified retirement plans may include the following:
●
Individual Retirement Accounts and Annuities (“Traditional IRAs”)
●
Roth IRAs
●
Traditional IRA that is part of a Simplified Employee Pension Plan (“SEP”)
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SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees)
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401(a) / (k) plans (qualified corporate employee pension and profit-sharing plans)
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403(a) plans (qualified annuity plans)
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403(b) plans (public school system and tax-exempt organization annuity plans)
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H.R. 10 or Keogh Plans (self-employed individual plans)
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457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations)
Our individual variable annuity products are not available for use with any of the foregoing qualified retirement plan accounts, with the exception of Traditional IRA, SEP IRA, and Roth IRA arrangements. We will amend contracts to be used with a qualified retirement plan as generally necessary to conform to the Code’s requirements for the type of plan. However, the rights of a person to any qualified retirement plan benefits may be subject to the plan’s terms and conditions, regardless of the contract’s terms and conditions. In addition, we are not bound by the terms and conditions of qualified retirement plans to the extent such terms and conditions contradict the contract, unless we consent.
45
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019
The Setting Every Community Up for Retirement Enhancement (SECURE) Act (the “SECURE Act”) was enacted on December 20, 2019. The SECURE Act made a number of significant changes to the rules that apply to qualified retirement plans and IRA’s, including the following:
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Eliminated the age 70½ limit for making contributions to an IRA. Beginning in 2020, an IRA owner can make contributions to his or her IRA at any age.
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Changed the required minimum distribution rules that apply after the death of a participant or IRA owner.
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Created the “Qualified Birth or Adoption” exception to the 10% additional tax on early distributions.
The Setting Every Community Up for Retirement Enhancement 2.0 (SECURE 2.0) Act of 2022
The Setting Every Community Up for Retirement Enhancement (SECURE 2.0) Act (the “SECURE 2.0 Act”) was enacted on December 29, 2022. The SECURE 2.0 Act made specific changes to retirement plans and IRA’s, including:
●
Increased the required beginning date measuring age from age 72 to 73 for any participant or IRA owner who did not attain age 72 prior to January 1, 2023. As a result, required minimum distributions are generally required to begin by April 1st of the year following the year in which the participant or IRA owner reaches age 73.
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Further increased the required beginning date measuring age to 75 by 2033.
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Created exception to the 10% additional tax for distributions for domestic violence and emergencies.
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Added provisions that permit rollover of 529 plan amounts to a Roth IRA for the beneficiary, within certain limits.
Tax Treatment of Qualified Contracts
The Federal income tax rules applicable to qualified retirement plans and qualified contracts vary with the type of plan and contract. For example:
●
Federal tax rules limit the amount of the Purchase Payment or contributions that can be made, and the tax deduction or exclusion that may be allowed for the contributions. These limits vary depending on the type of qualified retirement plan and the participant’s specific circumstances (e.g., the participant’s compensation).
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Minimum annual distributions are required under some qualified retirement plans once you reach age 73 or retire, if later as described below.
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Loans are allowed under certain types of qualified retirement plans, but Federal income tax rules prohibit loans under other types of qualified retirement plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your Contract or plan may not permit loans.
Please note that qualified retirement plans such as 403(b) plans, 401(k) plans and IRAs generally defer taxation of contributions and earnings until distribution. As such, an annuity does not provide any additional tax deferral benefit beyond the qualified retirement plan itself.
Tax Treatment of Payments
The Federal income tax rules generally include distributions from a qualified contract in the participant’s income as ordinary income. These taxable distributions will include contributions that were deductible or excludible from income. Thus, under many qualified contracts, the total amount received is included in income since a deduction or exclusion from income was taken for contributions to the contract. There are exceptions. For example, you do not include amounts received from a Roth IRA in income if certain conditions are satisfied.
Required Minimum Distributions
Under most qualified plans, you must begin receiving payments from the Contract in certain minimum amounts by your “required beginning date”. Prior to the SECURE 2.0 Act, the required beginning date was April 1 of the year following the year you attain age 72 or retired. If you did not attain age 72 prior to January 1, 2023, then your required beginning date will be April 1st of the year following the year in which you attain age 73 or retire. If you own a traditional IRA, your required beginning date under prior law was April 1st of the year following the year in which you attained age 72. If you did not attain age 72 prior to January 1, 2023, then your required beginning date will be April 1st of the year following the year in which you attain age 73. If you own a Roth IRA, you are not required to receive minimum distributions from your Roth IRA during your life.
Failure to comply with the minimum distribution rules applicable to certain qualified plans, such as Traditional IRAs, will result in the imposition of an excise tax. This excise tax is applied to the amount by which a required minimum distribution exceeds the actual distribution from the qualified plan.
Treasury regulations applicable to required minimum distributions include a rule that may impact the distribution method you have chosen and the amount of your distributions. Under these regulations, the presence of an enhanced Death Benefit, or other benefit which could provide additional value to your Contract, may require you to take additional distributions. An enhanced Death Benefit is
46
any Death Benefit that has the potential to pay more than the Contract Value or a return of investment in the Contract. Annuity contracts inside Custodial or Trusteed IRAs will also be subject to these regulations. Please contact your tax advisor regarding any tax ramifications.
Additional Tax on Early Distributions from Qualified Retirement Plans
The Code may impose a 10% additional tax on an early distribution from a qualified contract that must be included in income. The Code does not impose the additional tax if one of several exceptions applies. The exceptions vary depending on the type of qualified contract you purchase. For example, in the case of an IRA, the 10% additional tax will not apply to any of the following withdrawals, surrenders, or Annuity Payouts:
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Distribution received on or after the Annuitant reaches 59½,
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Distribution received on or after the Annuitant’s death or because of the Annuitant’s disability (as defined in the Code),
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Distribution received as a series of substantially equal periodic payments based on the Annuitant’s life (or life expectancy),
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Distribution received as reimbursement for certain amounts paid for medical care, or
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Distribution received for a “qualified birth or adoption” event.
These exceptions, as well as certain others not described here, generally apply to taxable distributions from other qualified retirement plans. However, the specific requirements of the exception may vary.
Unearned Income Medicare Contribution
Congress enacted the “Unearned Income Medicare Contribution” as a part of the Health Care and Education Reconciliation Act of 2010. This tax affects individuals whose modified adjusted gross income exceeds certain thresholds, is a 3.8% tax on the lesser of (i) the individual’s “unearned income,” or (ii) the dollar amount by which the individual’s modified adjusted gross income exceeds the applicable threshold. Distributions that you take from your Contract are not included in the calculation of unearned income because your Contract is a qualified plan contract. However, the amount of any such distribution is included in determining whether you exceed the modified adjusted gross income threshold. Please consult your tax advisor to determine whether your annuity distributions are subject to this tax.
Transfers and Direct Rollovers
As a result of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), you may be able to move funds between different types of qualified plans, such as 403(b) and 457(b) governmental plans, by means of a rollover or transfer. You may be able to rollover or transfer amounts between qualified plans and traditional IRAs. These rules do not apply to Roth IRAs and 457(b) non-governmental tax-exempt plans. There are special rules that apply to rollovers, direct rollovers and transfers (including rollovers or transfers of after-tax amounts). If the applicable rules are not followed, you may incur adverse Federal income tax consequences, including paying taxes which you might not otherwise have had to pay. Before we send a rollover distribution, we will provide a notice explaining tax withholding requirements (see Federal Income Tax Withholding). We are not required to send you such notice for your IRA. You should always consult your tax advisor before you move or attempt to move any funds.
The IRS issued Announcement 2014-32 confirming its intent to apply the one-rollover-per-year limitation of 408(d)(3)(B) on an aggregate basis to all IRAs that an individual owns. This means that an individual cannot make a tax-free IRA-to-IRA rollover if he or she has made such a rollover involving any of the individual’s IRAs in the current tax year. If an intended rollover does not qualify for tax-free rollover treatment, contributions to your IRA may constitute excess contributions that may exceed contribution limits. This one-rollover-per-year limitation does not apply to direct trustee-to-trustee transfers.
Direct Conversions and Recharacterizations
The Pension Protection Act of 2006 (PPA) permits direct conversions from certain qualified, retirement, 403(b) or 457(b) plans to Roth IRAs (effective for distributions after 2007). You are also permitted to recharacterize your traditional IRA contribution as a Roth IRA contribution, and to recharacterize your Roth IRA contribution as a traditional IRA contribution. The deadline for the recharacterization is the due date (including extensions) for your individual income tax return for the year in which the contribution was made. Upon recharacterization, you are treated as having made the contribution originally to the second IRA account. The recharacterization does not count toward the one-rollover-per-year limitation described above.
Effective for tax years beginning after December 31, 2017, pursuant to the Tax Cuts and Jobs Act (Pub. L. No. 115-97), recharacterizations are no longer allowed in the case of a conversion from a non-Roth account or annuity to a Roth IRA. This limitation applies to conversions made from pre-tax accounts under an IRA, qualified retirement plan, 403(b) plan, or 457(b) plan. Roth IRA conversions made in 2017 may be recharacterized as a contribution to a traditional IRA if the recharacterization is completed by October 15, 2018.
There are special rules that apply to conversions and recharacterizations, and if they are not followed, you may incur adverse Federal income tax consequences. You should consult your tax advisor before completing a conversion or recharacterization.
47
Death Benefit and IRAs
Pursuant to Treasury regulations, IRAs may not invest in life insurance contracts. We do not believe that these regulations prohibit the Death Benefit from being provided under the Contract when we issue the Contract as a Traditional or Roth IRA. However, the law is unclear and it is possible that the presence of the Death Benefit under a Contract issued as a Traditional or Roth IRA could result in increased taxes to you. Certain Death Benefit options may not be available for all of our products.
Federal Income Tax Withholding
We will withhold and remit to the IRS a part of the taxable portion of each distribution made under a Contract unless you notify us in writing prior to the distribution that tax is not to be withheld. In certain circumstances, Federal income tax rules may require us to withhold tax. At the time a withdrawal, surrender, or Annuity Payout is requested, we will give you an explanation of the withholding requirements.
Certain payments from your Contract may be considered eligible rollover distributions (even if such payments are not being rolled over). Such distributions may be subject to special tax withholding requirements. The Federal income tax withholding rules require that we withhold 20% of the eligible rollover distribution from the payment amount, unless you elect to have the amount directly transferred to certain qualified plans or contracts. The IRS requires that tax be withheld, even if you have requested otherwise. Such tax withholding requirements are generally applicable to 401(a), 403(a) or (b), HR 10, and 457(b) governmental plans and contracts used in connection with these types of plans.
Changes in the Law
The above discussion is based on the Code, related regulations, and interpretations existing on the date of this prospectus. However, Congress, the IRS, and the courts may modify these authorities, sometimes retroactively.
Additional Information
Voting Rights
There are no voting rights associated with the Indexed Accounts.
Return Privilege
Within the free-look period after you receive the Contract, you may cancel it for any reason by sending us a letter of instruction, indicating your intent to exercise the free-look provision. A Contract canceled under this provision will be void. Except as explained in the following paragraph, we will return the greater of a full refund of the amount you paid with your application or your total Contract Value. A purchaser who participates in the Indexed Accounts risks the loss of principal as it will be based on Interim Value.
IRA purchasers will receive the greater of Purchase Payments or Contract Value as of the Valuation Date on which we receive the cancellation request.
If you cancel this Contract within the free-look period, we reserve the right not to accept another application for this Contract for a period of six months.
State Regulation
As a life insurance company organized and operated under New York law, we are subject to provisions governing life insurers and to regulation by the New York Commissioner of Insurance. Our books and accounts are subject to review and examination by the New York State Department of Financial Services at all times. A full examination of our operations is conducted by that Department at least every five years.
Reliance On Rule 12h-7
We rely on the exemption from the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), provided by Rule 12h-7 under the 1934 Act with respect to registered non-variable insurance contracts (such as the Contract) that we issue.
Electronic Delivery
You may elect to receive your Contract, prospectus, prospectus supplements, quarterly statements, and other notices electronically over the Internet, if you have an e-mail account and access to an Internet browser. Once you select eDelivery, via the Internet Service Center, all documents available in electronic format will no longer be sent to you in hard copy. You will receive an e-mail notification when the documents become available online. It is your responsibility to provide us with your current e-mail address. You can resume paper mailings at any time without cost, by updating your profile at the Internet Service Center, or contacting us. To learn more about this service, please log on to www.LincolnFinancial.com, select service centers and continue on through the Internet Service Center.
48
Legal Proceedings
In the ordinary course of its business and otherwise, the Company and its subsidiaries or its separate accounts and Principal Underwriter may become or are involved in various pending or threatened regulatory or legal proceedings, including purported class actions, arising from the conduct of its business. In some instances, the proceedings include claims for unspecified or substantial punitive damages and similar types of relief in addition to amounts for alleged contractual liability or requests for equitable relief.
After consultation with legal counsel and a review of available facts, it is management’s opinion that the proceedings, after consideration of any reserves and rights to indemnification, ultimately will be resolved without any material adverse effect on the consolidated financial position of the Company and its subsidiaries, or the financial position of its separate accounts or Principal Underwriter. However, given the large and indeterminate amounts sought in certain of these proceedings and the inherent difficulty in predicting the outcome of such proceedings, it is reasonably possible that an adverse outcome in certain matters could be material to the Company’s operating results for any particular reporting period.
Please refer to the Statement of Additional Information for possible additional information regarding legal proceedings.
Financial Statements
The December 31, 2025 financial statements of Lincoln New York are included in the Statement of Additional Information (SAI). They should be considered only as they relate to our ability to meet our obligations under the Contract. Instructions on how to obtain the Statement of Additional Information are included on the back cover page.
49
|
Index |
Type of Index |
Term
Duration |
Index Crediting
Methodology |
Protection Method and
Amount of Protection |
Guaranteed Minimum
Declared Crediting
Method Rate |
Guaranteed Minimum
Reset Rate Under
Secure Lock+®
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A-1
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Index |
Type of Index |
Term
Duration |
Index Crediting
Methodology |
Protection Method and
Amount of Protection |
Guaranteed Minimum
Declared Crediting
Method Rate |
Guaranteed Minimum
Reset Rate Under
Secure Lock+® | |||
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A-2
Appendix B — Index Disclosures
B-1
B-2
B-3
The SAI includes additional information about the Contract and Lincoln New York, and is incorporated by reference in this prospectus. The SAI is dated the same date as this prospectus. We will provide the SAI without charge upon request. You may obtain a free copy of the SAI and submit inquiries by:
●
Mailing: Lincoln Life & Annuity Company of New York, PO Box 2348, Fort Wayne, IN 46801-2348
●
Visiting: www.lfg.com/VAprospectus
●
Emailing: CustServSupportTeam@lfg.com
●
Calling: 1-877-737-6872
You may also obtain reports and other information about the Company on the SEC’s website at www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers and the Contract’s contract identifier number are listed below.
SEC File No.:
333-283685
EDGAR Contract Identifier:
C000257790
333-283685
EDGAR Contract Identifier:
C000257790
SAI 2
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Dated May 8, 2026
Relating to Prospectus Dated May 8, 2026 for
Relating to Prospectus Dated May 8, 2026 for
Lincoln Level Advantage 2® Advisory
Lincoln Life & Annuity Company of New York
The SAI provides you with additional information about Lincoln New York and your Contract. It is not a prospectus.
A copy of the product prospectus dated May 8, 2026, may be obtained without a charge by writing to the Servicing Office: Lincoln New York Customer Service, Lincoln Life & Annuity Company of New York, PO Box 2348, Fort Wayne, IN 46801-2348, by calling: 1-877-737-6872, or by emailing: CustServSupportTeam@lfg.com and requesting a copy of the Lincoln Level Advantage 2® Advisory product prospectus.
TABLE OF CONTENTS OF THE SAI
|
Contents |
Page |
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B-3 | |
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B-8 | |
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B-8 | |
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B-8 | |
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B-8 |
Special Terms
The special terms used in this SAI are the ones defined in the prospectus.
General Information and History
Lincoln Life & Annuity Company of New York
Lincoln Life & Annuity Company of New York (Lincoln New York or Company) is a stock life insurance company chartered in 1897 and now domiciled in New York. Lincoln New York is a subsidiary of The Lincoln National Life Insurance Company (Lincoln Life). Lincoln Life is an Indiana-domiciled insurance company, engaged primarily in the direct issuance of life insurance contracts and annuities. Lincoln Life is wholly owned by Lincoln National Corporation (LNC), a publicly held insurance and financial services holding company incorporated in Indiana. Lincoln New York is obligated to pay all amounts promised to Contractowners under the contracts.
Our Financial Condition. Any amounts that we may pay under the Contract are subject to our financial strength and claims-paying ability and our long-term ability to make such payments. We issue other types of insurance policies and financial products in addition to the Contract. We also pay our obligations under these products from our assets in the general account. Certain assets backing the Contracts are held in an uninsulated, non-unitized separate account (the SA). The assets of the SA and the general account are subject to the general liabilities of the Company and, therefore, to the Company’s general creditors. In the event of an insolvency or receivership, payments we make from our general account to satisfy claims under the Contract would generally receive the same priority as our other Contractowner obligations.
The general account is subject to regulation and supervision by the New York State Department of Financial Services. The laws and regulations applicable to us regulate the investments we can make with assets held in the SA and our general account. In general, those laws and regulations determine the amount and type of investments which we can make with general account assets.
In addition, state insurance regulations require that insurance companies calculate and establish on their financial statements, a specified amount of reserves in order to meet the contractual obligations to pay the claims of our Contractowners. In order to meet our claims-paying obligations, we regularly monitor our reserves to ensure we hold sufficient amounts to cover actual or expected contract and claims payments. However, it is important to note that there is no guarantee that we will always be able to meet our claims paying obligations, and that there are risks to purchasing any insurance product.
State insurance regulators also require insurance companies to maintain a minimum amount of capital in excess of liabilities, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurer’s operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on assets held in our general account, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in value of these investments resulting from a loss in their market value.
How to Obtain More Information. We encourage both existing and prospective Contractowners to read and understand our financial statements. We prepare our financial statements on both a statutory basis and according to Generally Accepted Accounting Principles (GAAP). Our audited GAAP financial statements, are incorporated by reference into this SAI. See Financial Statements below. You may obtain our audited statutory financial statements and any unaudited statutory financial statements that may be available by visiting our website at www.LincolnFinancial.com.
You also will find on our website information on ratings assigned to us by one or more independent rating organizations. These ratings are opinions of an operating insurance company’s financial capacity to meet the obligations of its insurance and annuity contracts based on its financial strength and/or claims-paying ability.
Non-Principal Risks of Investing In The Contract
Opportunity Cost. Principal amounts committed to an annuity contract are only available to choose from investment options available in the Contract, potentially causing you an opportunity cost.
Dying early. If you die earlier than expected, your designated beneficiary may not receive the full benefit of the future payments.
Divorce. If you get divorced, you could forfeit some or all of the value of your annuity to your former spouse.
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Services
Independent Registered Public Accounting Firm
Ernst & Young LLP, independent registered public accounting firm, One Commerce Square, 2005 Market Street, Suite 700, Philadelphia, Pennsylvania, 19103, has audited the financial statements of Lincoln Life & Annuity Company of New York as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, as set forth in their report, which is included in this SAI and Registration Statement. The aforementioned financial statements are included herein in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.
Purchase of Securities Being Offered
The contracts are offered to the public through licensed insurance agents who specialize in selling our products and who are also associated with broker-dealers; through independent insurance brokers who are also associated with broker-dealers; and through certain securities brokers/dealers selected by us whose personnel are legally authorized to sell annuity products. There are no special purchase plans for any class of prospective buyers. However, under certain limited circumstances described in the prospectus under the section Charges and Other Deductions, any applicable account fee may be reduced or waived.
Contract Adjustment – Interim Value Calculation
Interim Value for Indexed Segments with no Annual Locks
The Interim Value of a Segment is equal to the sum of (1) and (2), where:
(1) is the value of the Fixed Income Asset Proxy of a Segment on the Valuation Date the Interim Value is calculated. It is determined for a Segment as: C x [1 / (1 + E)D x (1 + E)D / (1 + F)D]
where:
C = is the Crediting Base of the Segment on the Valuation Date of the calculation.
D = is the total calendar days remaining in the Indexed Term divided by 365.
E = is the Discount Rate that applies to the Segment on the Start Date of the Segment.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
F = is the Discount Rate that applies to the Segment on the Valuation Date.
(2) is the market value of the Derivative Asset Proxy, determined solely by us, on the Valuation Date of the calculation.
Interim Value for Indexed Segments with Annual Locks
The Interim Value of a Segment is equal to the sum of (1) and (2), where:
(1) is the value of the Fixed Income Asset Proxy of a Segment on the Valuation Date the Interim Value is calculated. It is determined for a Segment as: C x [1 / (1 + E)D x (1 + E)D / (1 + F)D]
where:
C = is the initial Crediting Base of the Segment that has been proportionately adjusted for any withdrawals, premium taxes, or rider fees and charges that have occurred during the Indexed Term prior to the Valuation Date of the calculation.
D = is the total calendar days remaining in the Indexed Term divided by 365.
E = is the Discount Rate that applies to the Segment on the Start Date of the Segment.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
If an election to lock and reset a Segment is exercised during the Indexed Term, F is the Discount Rate that applies to the Segment on the Reset Date.
F = is the Discount Rate that applies to the Segment on the Valuation Date.
(2) is the market value of the Derivative Asset Proxy, determined solely by us, on the Valuation Date of the calculation.
Each component of the calculation is further explained as follows:
1.
Fixed Income Asset Proxy. The Fixed Income Asset Proxy is a hypothetical fixed income asset that is meant to represent the
market value of the investment instruments supporting the Segment.
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The Discount Rate is derived from the Reference Rate, which is the sum of a U.S. Constant Maturity Treasury (CMT) yield plus a
market observable spread of investment grade U.S. corporate bonds.
If the U.S. Constant Maturity Treasury yield(s) are not published for a particular day or we are delayed in receiving these values, then we will use the yield(s) on the last day they were published. If the U.S. Constant Maturity Treasury yield(s) are no longer published, are not published for an extended period, or are discontinued, then we may substitute another suitable method for
determining these components of the Reference Rate.
If the U.S. Constant Maturity Treasury yield(s) are not published for a time to maturity that matches the selected duration, then
the yield(s) will be interpolated between the yield(s) for maturities that are published.
If the market observable spread(s) of investment grade U.S. Corporate Bonds are not published for a particular day, or we are delayed in receiving these values then we will use the spread(s) on the last day they were published. If these components are no longer published, are not published for an extended period, or are discontinued, then we may substitute another suitable method
for determining these components of the Reference Rate.
We reserve the right to change the methodology of the Interim Value calculation at any time and at our sole discretion.
2.
Derivative Asset Proxy. We utilize a fair market methodology to value the replicating portfolio of financial instruments that sup
port the product.
The Derivative Asset Proxy is determined assuming a package of derivative assets and other financial instruments, determined solely by Us, that replicates the Performance Rate on the End Date of the Segment. The value of the package of derivative assets and other financial instruments is determined on any Valuation Date that the Interim Value is calculated for a Segment. The valuation of the financial instruments is based on standard methods for valuing financial instruments and based on inputs from third party vendors. The methodology used to value these financial instruments is determined solely by us and may vary, higher or lower, from other estimated valuations or the actual selling price of identical financial instruments. Any variance between our estimated fair value price and other estimated or actual prices may be different from Segment type to Segment type and may
also change from day to day.
The options or other instruments for each Indexed Account type are as follows:
A. At-the money call option: This represents the market value of the potential to receive an amount equal to the percentage growth in the Index during the Indexed Term.
B. Out-of-the-money call option: This represents the market value of the potential for gain in excess of the Performance Cap rate.
C. Out-of-the-money put option: This represents the market value of the potential to receive an amount equal to the excess loss beyond the Protection Level.
D. Digital option: This represents the market value of the option to provide the Performance Trigger Rate under zero or positive Index returns.
E. At-the money put option: This represents the market value of the potential to receive an amount equal to the percentage loss of the index during the Indexed Term.
F. Dual structure: This represents the market value of receiving a maturity amount equal to the Dual Performance Trigger Rate or Dual Rate at the end of the Indexed Term independent of the underlying index returns.
NOTE: Put option C will always reduce the Interim Value even if the Index has increased during the Indexed Term.
For each Segment with no Annual Lock with Performance Cap rates and Protection Levels, the replicating portfolio of options is equal to: A minus B minus C.
For each Segment with Performance Trigger Rates and Protection Levels, the replicating portfolio of options is equal to: D minus C.
For each Segment with a Dual Performance Trigger Rate and Protection Level, the replicating portfolio of financial instruments is equal to: F minus C.
For each Segment with Annual Lock, we designate and value a replicating (derivative) structure which is tied to the compounded performance for each year of the Annual Lock Segment. The market standard model is adjusted by us to account for additional market risks relevant to the Annual Lock Segment.
For each Dual Plus Segment, the replicating portfolio of financial instruments is equal to: F plus B (at the Dual Rate) minus B (at the Performance Cap Rate) minus E.
The key inputs, including but not limited to the following, are also incorporated into the models:
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(1) Implied Volatility of the Index—This input varies with (i) how much time remains until the Segment End Date, which is determined by using an expiration date for the designated option that corresponds to that time remaining and (ii) the relationship between the strike price of that option and the level of the index at the time of the calculation (including the potential for resets of each Annual Lock Period).
This relationship is referred to as the “moneyness” of the option described above, and is calculated as the ratio of current price to the strike price. Direct market data for these inputs for any given early withdrawal is generally not available. This is because options on the Index that actually trade in the market have specific maturity dates and moneyness values that are unlikely to precisely match the Segment End Date (or remaining Annual Lock Periods) and moneyness of the designated option that we use in our calculations. Accordingly, we interpolate between the implied volatility quotes that are based on the actual maturities and moneyness values.
(2) Interest Rate—We use key derivative interest rates obtained from information provided by independent third-parties which are recognized financial reporting vendors. Interest rates are obtained for maturities adjacent to the actual time remaining in the Segment at the time of the early withdrawal. We use linear interpolation to derive the exact remaining duration rate needed as the input.
(3) Index Dividend Yield—On a daily basis, we use the projected annual dividend yield across the entire index obtained from information provided by independent third-party financial institutions. This value is a widely used assumption and is readily available from recognized financial reporting vendors.
In addition, when we calculate the Interim Value, we calculate market values of financial instruments each business day based on inputs from outside vendors. Inputs obtained from these outside vendors may vary over time based on market conditions and changes in valuation standards. If we are delayed in receiving these values, we will use the option value on the last day it was available to calculate a new Interim Value.
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Examples
The following examples demonstrate how the Interim Value is calculated in different scenarios for Indexed Segments with Performance Caps and Protection Levels.
|
|
1 Year |
6 Year |
6 Year |
|
Indexed Term length |
12
months |
72
months |
72
months |
|
Months since Indexed Term Start Date |
9 |
69 |
15 |
|
Indexed Crediting Base |
$1,000 |
$1,000 |
$1,000 |
|
Protection Level |
10% |
10% |
10% |
|
Performance Cap |
12% |
100% |
100% |
|
Months to End Date |
3 |
3 |
57 |
|
Change in Index Value is -30% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$(197) |
$(197) |
$(163) |
|
Interim Value = Sum of 1 + 2 |
$800 |
$800 |
$777 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$800 |
$800 |
$800 |
|
Change in Index Value is -10% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$(28) |
$(27) |
$(6) |
|
Interim Value = Sum of 1 + 2 |
$969 |
$970 |
$934 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$1,000 |
$1,000 |
$1,000 |
|
Change in Index Value is 20% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$104 |
$203 |
$210 |
|
Interim Value = Sum of 1 + 2 |
$1,101 |
$1,200 |
$1,150 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$1,120 |
$1,200 |
$1,200 |
|
Change in Index Value is 40% |
1 Year |
6 Year |
6 Year |
|
1. Fair value of the fixed income asset proxy |
$997 |
$997 |
$940 |
|
2. Fair value of derivative asset proxy |
$119 |
$401 |
$335 |
|
Interim Value = Sum of 1 + 2 |
$1,116 |
$1,398 |
$1,275 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not
change prior to the End Date) |
$1,120 |
$1,400 |
$1,400 |
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The following examples demonstrate how the Interim Value is calculated in different scenarios for Dual Plus Indexed Segments.
|
|
|
6 Year |
6 Year |
|
Indexed Term length |
|
72
Months |
72
Months |
|
Months since Indexed Term Start Date |
|
54 |
18 |
|
Indexed Crediting Base |
|
$1,000 |
$1,000 |
|
Dual Rate |
|
15% |
15% |
|
Performance Cap |
|
70% |
70% |
|
Months to End Date |
|
18 |
54 |
|
Change in Index Value is -15% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$(10) |
$(12) |
|
Interim Value = Sum of 1 + 2 |
|
$967 |
$922 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,000 |
$1,000 |
|
Change in Index Value is -5% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$67 |
$57 |
|
Interim Value = Sum of 1 + 2 |
|
$1,044 |
$991 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,100 |
$1,100 |
|
Change in Index Value is 10% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$175 |
$149 |
|
Interim Value = Sum of 1 + 2 |
|
$1,152 |
$1,083 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,150 |
$1,150 |
|
Change in Index Value is 20% |
|
6 Year |
6 Year |
|
1. Fair Value of the fixed income asset proxy |
|
$977 |
$934 |
|
2. Fair Value of derivative asset proxy |
|
$245 |
$205 |
|
Interim Value = Sum of 1 + 2 |
|
$1,222 |
$1,139 |
|
Segment Ending Value (this value assumes the Index performance and Crediting Base did not change
prior to the End Date) |
|
$1,200 |
$1,200 |
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Principal Underwriter
Lincoln Financial Distributors, Inc., (“LFD”) is a wholly owned subsidiary of Lincoln National Corporation and an affiliate of Lincoln New York as a result of common control. LFD serves as the principal underwriter (the “Principal Underwriter”) for the Contracts, as described in the prospectus. The offering of the Contracts is continuous. The Principal Underwriter has also entered into selling agreements with other broker-dealers (“Selling Firms”) for the sale of the contracts. Sales representatives who are registered with Selling Firms are appointed as our insurance agents. LFD, in its capacity as Principal Underwriter, has paid no sales compensation to date in connection with the Contracts. The Principal Underwriter retained no underwriting commissions for the sale of the contracts. LFD maintains its principal place of business at 130 North Radnor Chester Road, Radnor, Pennsylvania 19087.
Contract Information
Additional Services
Automatic Withdrawal Service (AWS)—AWS provides an automatic, periodic withdrawal of Contract Value to you. AWS may take place on either a monthly, quarterly, semi-annual or annual basis, as selected by the Contractowner. You may elect to participate in AWS at the time of application or at any time before the Annuity Commencement Date by sending a written request or in another manner acceptable to us. The minimum Contract Value required to establish AWS is $10,000. You may cancel or make changes to your AWS program at any time by sending a written request to us. If telephone authorization has been elected, certain changes may be made by telephone. Notwithstanding the requirements of the program, any withdrawal must be permitted under Section 401(a)(9) of the IRC for qualified plans or permitted under Section 72 of the IRC for nonqualified contracts.
Financial Statements
The December 31, 2025 financial statements of Lincoln New York are incorporated into this SAI by reference to the most recent Form N-VPFS (“N-VPFS”) filed with the SEC.
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